Oil prices could collapse to $ 30 per barrel if OPEC+ at the meeting in March decided not to reduce the extraction of raw materials.
This writes Bloomberg with reference to data Finance Corporation, Standard Chartered Bank, reports Tape.ru.
As explained by analysts, the demand for oil in the world fell sharply in the first quarter of 2020 because of the epidemic of Chinese coronavirus. Concerns the spread of the disease has led to the reduction of road traffic, including air traffic, and reduced demand for fuel.
In addition, because of the epidemic, the Chinese government has stopped industrial enterprises that has also hit demand for raw materials. In February, the coronavirus spread to Europe. The focus of the spread caused by the virus pneumonia in the region was the industrial North of Italy to have also aggravated the situation in the oil market.
“[The refusal to cut oil production] will make the market vulnerable and will lead to a short-term drop in the cost of raw materials is below $ 30 per barrel,” say analysts at Standard Chartered. At the same time, experts believe that OPEC+ will go for further production cuts as the price of failure is too great.
At Goldman Sachs, speaking about the current oil market situation, called it the strongest demand shock since the global economic crisis of 2008.
In the last week of February, may futures for Brent crude fell below $ 50 per barrel, showing the worst result for 2.5 years. April WTI futures dropped below 44 dollars, which is a minimum of 3.5 years. The fall in oil prices occurred against the backdrop of the collapse of key stock indices in the US and Europe.
Monday, March 2, the cost of raw materials went up. May futures on Brent rose to 51,96 per barrel during trading on the London stock exchange ICE. The cost of the April futures for WTI has increased to 46.72 USD. The main stock indices of the US and Europe on Monday also showed growth.
Katrine Johns has been a reporter on the news desk since 2013. Before that she wrote about young adolescence and family dynamics for Styles and was the legal affairs correspondent for the Metro desk. Before joining The Gal Post, Katrine Johns worked as a staff writer at the Village Voice and a freelancer for Newsday, The Wall Street Journal, GQ and Mirabella. To get in touch, contact me through my email@example.com 1-800-268-7128