According to various trade analysts, oil prices could slip by $5 per barrel due to the worldwide spread of Coronavirus. Brent, as well as West Texas Intermediate Crude oil, have already fallen over the last week. However, they can suffer further losses due to the uncertainty in the market created by Coronavirus outbreak.
On Wednesday, the WTI (West Texas Intermediate) traded at $49.81 per barrel, registering a loss of 18% since the beginning of this year. On the other hand, Brent oil prices rested at $52.22 per barrel on Wednesday. Brent saw a constant dip in prices by 17% within the same period of time.
As more people are staying indoors and avoiding travel, Chinese oil demand has dropped by a staggering 20%. In other words, this is equivalent to 20 million barrels per day.
Energy experts claim that oil prices won’t show any significant improvement in the coming weeks. It will turn around once Coronavirus is contained and the Chinese economy recovers.
Oil Price Recovers 3% With The News of Coronavirus Drug
There was a sudden jump in oil prices by 3% in the second half of Wednesday. This happened due to circulating reports that claim researchers have found an effective drug to treat and suppress Coronavirus.
Moreover, the OPEC countries declared that they will reduce the daily output of oil. This way they would deal with the constant fall in crude oil demand. Brent prices shot up by $1.44 per barrel while WTI prices went up by $1.19 per barrel.