Crude prices hit a one-year low as coronavirus spreads
Panic over the coronavirus outbreak drove crude oil prices to their lowest in a year, as Brent futures neared the US$50 a barrel resistance level. This is a drop of around US$18 since January, when it hit nearly US$70 a barrel in response to US air strikes against an Iranian general.
The total number of cases of virus reported last weekend were above 83,000, with deaths nearing 3,000. New cases were recorded in several countries previously unaffected. These included Nigeria, with the first case in sub-Saharan Africa, and a case in Brazil – the first in Latin America. Other key economies watched by traders were Italy, South Korea and Iran, where the number of cases recorded rocketed in recent sessions filtering in fears for the global economy.
Airlines were some of those hit hardest sectors by the crisis and the market. IAG, which owns British Airways and Iberia, announced it cannot provide earnings forecast for this year, while EasyJet cancelled flights due to lower demand. The groups operate the third and fifth largest airlines in Europe.
Meanwhile, OPEC and allies were rumoured to be looking to cut one million barrels a day to combat falling crude prices.
Earlier in the week, the fall briefly slowed following the release of the weekly US stocks data from EIA. Gasoline stockpiles took the largest hit, falling 2.69 million barrels in the week ending 21 February. But Traders quickly shrugged off the losses in gasoline stockpiles as rampant selling gripped the market.
