Oil prices have seen another spike on Tuesday morning, following slumps of almost 4% recorded on Monday.
Concerns about the coronavirus are continuing to spread – and a few days back I was here writing about how it looked like the epidemic was under control.
This turned out to be a call made too soon however – worries now that the coronavirus has spread to Italy has raised concern levels not just for investors and traders, but also global governments.
Global equities still seem to be recovering from the slump that was seen on Monday – the Dow Jones plunged more than 900 points, as well as slips to oil derivatives.
The demand for oil has been volatile since the outbreak of the coronavirus, and any gains in price have been offset by falling supply measures.
Last week, OPEC+ announced that they would be monitoring the supply of oil very carefully in order to keep oil derivative prices steady at a time where the global economy is in shock.
There is no doubt that the coronavirus is still very much at large – countries and governments are trying to put together an action plan to stop any further spread, however this is seeming to be a bigger challenge than what was initially expected.
Reports in China have suggested that the virus has now affected more than 80,000 people – a significant number considering that this is ten times more than the SARS coronavirus outbreak in 2002/2003.
However, Saudi Arabia’s Minister of Energy Prince Abdulaziz bin Salman said that OPEC+ should not be complacent about the coronavirus.
Following the slump that was faced on Monday, oil prices are still trying to recover. The outbreak of the coronavirus still continues to dominate news headlines, as the U.S. Centers for Disease Control and Prevention (CDC) warned that “more cases are likely to be identified in the coming days” in the United States, although it said that the “immediate health risk” is “low.”
OPEC+ are scheduled to meet at the end of next week, however continued tensions between Russia and Saudi Arabia may mean that negations could stutter.
The price of WTI Crude is currently $51.40, whilst Brent Crude trades at $55.78.