Adedapo Adesanya
By Adedapo Adesanya
More worries for the global economy as the global benchmark crude, Brent Crude, fell below $30 per barrel on Wednesday afternoon, below its lowest since 2016.
The continuous spread of the coronavirus globally has forced more countries to place restrictions on travel. Europe has also tightened restrictions on travel as cases continue to rise. Africa has not been left out as well as the United States, and other parts of the world.
As at the time of filing this report on Wednesday afternoon, the Brent crude was down by $1.55 or 5.10 percent to $28.86 per barrel, while the US West Texas Intermediate (WTI) crude was down $2.90 or 10.61 percent at $24.43 per barrel, the lowest since 2002.
The contagious virus has continued to plunge the global market into further fear as demand are expected to fall by eight million barrels this month. It has been projected that there would be an annual decline of 1.1 million barrel per day in 2020, the biggest on record.
The present situation has forced a key member of the Organisation of the Petroleum Exporting Countries (OPEC), Iran, to call for an emergency meeting between members of the cartel and non-OPEC producers to discuss immediate action to support the market.
But that isn’t going to happen as the Saudi Arabia and Russia are deep in a battle for market share that crashed the market due to failure to cut supply when they met earlier this month.
Russia said it will increase production, with Saudi Arabia boosting its production to 13 million barrels, while the United Arab Emirates will go up to 5 million barrels per day and Kuwait to 4 million barrels per day, pressuring prices of the black gold.
As demand is affected, the market is also facing an expanding oil supply which is not getting buyers. Analysts see prices falling further and this will likely bring oil producers and its allies to the discussion table.
