Price of oil falls following coronavirus impact

Price of oil falls following coronavirus impact

The Organization of the Petroleum Exporting Countries (OPEC) and its Russian ally has summoned for meetings in Vienna on Tuesday and Wednesday to analyse the decrease of crude prices in connection with the new coronavirus epidemic.

Oil prices have been falling sharply since the beginning of the year, weakened by concerns over the stagnation of the Chinese economy due to the coronavirus epidemic.

The OPEC Technical Committee and its partners are traditionally responsible for analysing the situation on the oil market in order to help the cartel adjust its production quotas to influence prices.

The next ministerial meeting of OPEC countries led by Saudi Arabia with their allies outside of the organization, including Russia, is still scheduled for 5-6 March.

Faced with the uncertainty created by the epidemic, the possibility of advancing the ministerial meeting of this group (called OPEC+) has, however, been raised in recent days.

OPEC+ unites fourteen OPEC members and ten other oil powers. These countries have been linked since the end of 2016 by a production restraint agreement to support crude prices against a very abundant supply.

They must decide in March if they renew their volume production limitation or if they increase it because of the world economy.

The Brent barrel dropped below the symbolic 60 dollars. It has lost 11.9% over a month, recording its largest decrease since November 2018.

Investors fear the consequences of the viral pneumonia epidemic which appeared in December in Wuhan, in central China, before spreading elsewhere in the country and abroad. China which is the largest importer and the world's second-largest oil consumer, is a key market player.

The Brussels Times

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