By Adedapo Adesanya
Prices of crude oil prices fell on Friday as worries over the coronavirus plaguing the oil market resumed its effect on demand.
At the market yesterday, the Brent crude fell 90 cents or 1.53 percent to $57.90 per barrel, while the US West Texas Intermediate (WTI) crude shed 45 cents or 0.84 percent to settle at $53.43 per barrel.
The coronavirus had affected Nigerian cargoes, which did not sail for China in February and this left the country to depend on European demand, which is lower than what is receives from the Asian giant. This has forced the Nigerian National Petroleum Corporation (NNPC) to put up an across-the-board price cut on its March 2020 official selling prices.
This means that Nigeria’s flagship export streams like Bonny Light, Qua Iboe, Forcados, Egina or Escravos would have their prices all cut by 50-60 cents per barrel month-on-month.
Also, analysts say the decision by the Organisation of the Petroleum Exporting Countries and its allies, OPEC+, not to move its March meeting forward, while Russia indicated that it currently has no intentions to cut production, further affected prices on Friday.
One of the factors helping prices is the hope that the reduction in supply by the oil producers’ group to 2.3 millions barrels per day would happen during the week, but when this did not occur, prices started shedding.
According to Russian Energy Minister, Mr Alexander Novak, on Friday morning, producers understood it would no longer be necessary to meet before a planned gathering in March. The meeting will take place in Vienna, Austria between March 5 and 6.
Meanwhile, the concerns over the virus have also overshadowed risks to supply, including the latest blockade in Libya which would normally have helped prices.
According to reports, the United Nations on Friday said ceasefire talks were back on track between forces fighting over Libya’s capital, Tripoli some days after the internationally recognised government pulled out of negotiations.
With the Zawiya Refinery, one of its major refineries, shut since February 8, supplying Tripoli with fuel has been increasingly difficult as Libyan oil production dropped to 122,000 barrels per day as of February 20.
An agreement between both could end outages of about 1 million barrels per day of Libyan oil and increase pressure on prices.
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