By Adedapo Adesanya
Oil futures went down further on Friday, January 31 as fears surrounding the coronavirus and its impact on oil demand continue to pull prices.
Brent crude fell 75 cents or 1.31 percent to $56.58 per barrel, while the US West Texas Intermediate (WTI) crude fell 59 cents or 1.1 percent to settle at $51.55, meaning that the WTI posted a fourth straight week of losses, the worst performance for the futures since May 2019.
Markets continue to grow more concerned about the economic damage of the new coronavirus that has spread from China to around 20 countries, killing more than 220 people and affecting over 8,000 people.
The outbreak could cut China’s oil demand by more than 250,000 barrels per day (bpd) in the first quarter of the year, according to analysts. It is also expected that China’s economy will grow by 0.4 percentage point in 2020 and will also affect the US economy as well.
Prices were looking to rally but did not amount to much after the Russian Energy Minister, Mr Alexander Novak, said his country was ready to bring forward a meeting of Organisation of the Petroleum Exporting Countries (OPEC) and its allies to February from March to address a possible change to global oil demand from the virus.
Mr Novak said he was in discussions with OPEC leader, Saudi Arabia, and that the oil-producing nations would need several more days to assess the impact and decide on the date of the meeting.
This means that OPEC and its allies could meet soon to discuss deepening their production cuts, in an effort to cut short the sharp decline in oil prices due to demand scare from the coronavirus outbreak.
Officials of the cartel primary members had scheduled to meet on March 5 and 6 in Vienna alongside Russia and their other non-OPEC partners to review their production deal, and possibly increase their cuts from 1.7 million barrels agreed upon last year to a higher cut.
OPEC expects its world market share to fall further as output booms in non-OPEC rivals including the US, Brazil, Canada, Australia, Norway and Guyana while global demand is rising.
Analysts say a further cut will help stabilise prices but may have effect on oil revenue expected.
