Oil prices drop again as coronavirus cases escalate
Oil prices fell again today as the spread of the coronavirus cast uncertainty over the world economy.
Oil prices saw further falls after an initial rally today after yesterday’s slump. A spike in the number of coronavirus cases dragged prices back down, along with the world’s stocks.
Brent Crude plunged almost five per cent to $49.21 while West Texas Intermediate crude sank 6.2 per cent to $44.18.
“While Brent has only recently come down toward the $50 per barrel mark – the lowest levels since December 2018 – it’s possible that we may see a further decline down to $45 per barrel if the situation persists,” said Callum Macpherson, head of commodities at Investec.
Fears over the demand for oil in light of the crisis have seen oil prices fall to their lowest levels in over a year.
This comes ahead of a meeting of the OPEC countries and their allies, including Russia, known as OPEC+, to decide whether to cut production levels.
Oil is one of many sectors to be affected by the outbreak.
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Airline stocks have fallen over travel restrictions and cancelled flights. And British Airways owner IAG today warned it cannot calculate how badly 2020 profit will be affected.
The automotive sector has also been adversely affected as manufacturers are unable to source parts from their Chinese supply chain.
Major supporting events such as the Guinness Six Nations have been disrupted and there are doubts as to whether the summer’s Tokyo Olympics will go ahead.
The first UK fatality from the virus was announced today as a passenger who died after being on board the quarantined cruise ship Diamond Princess in Japan.
A case has now been reported in Wales in addition to New Zealand, Nigeria and Lithuania.