By Adedapo Adesanya
The performance of the oil market is not expected to be different from what was seen last week. In fact, things are anticipated to get worse as nations continue to feel the negative impact of the coronavirus disease, which has brought the world to its knees, with airports shutting down so as to curb the COVID-19 pandemic.
The market still feeling the impact of the crash in crude oil prices caused by the rift between the leader of the Organisation of the Petroleum Exporting Countries (OPEC), Saudi Arabia and its former ally, Russia, though efforts are being made to have the two giants to sit on a table for talks.
Until this is done and the pandemic is curtailed, the bearish performances of the market may continue because the demand for the black gold is not expected to rise anytime soon due to travel restrictions across the globe.
Last week, the Brent fell below $30 per barrel, declining for the fourth straight week, while its counterpart, the US West Texas Intermediate (WTI), traded around $20 per barrel region during the week despite the intervention of the US Federal Reserves.
This new week, the market will likely react to calls from US Senators and congressmen to the US President, Mr Donald Trump, to impose an embargo on oil imports from Saudi Arabia, Russia and other OPEC nations to force OPEC back to the discussion table as well as support US Shale oil.
There are strong fears that the market might face more worries that could further drive prices lower. This is because the current cuts of 1.7 million barrels from the now disbanded OPEC+ will expire this week, precisely on March 31. From next month, if no further deal comes up, the market will experience an over supply and weaker demand.
And with demand expected to fall as much as much as 10 million barrels per day (bpd), equivalent to about 10 percent of daily global crude consumption, this week doesn’t hold much promises price wise.
On Monday, the Brent Crude traded at $27.28 per barrel, while the US WTI was sold at $21.99 per barrel.
