KARACHI: Following a rebound in black gold last week, crude oil found itself trading sharply lower on Wednesday as the rapid spread of the coronavirus spurred heavy selling pressure.
Oil prices slid for a fourth day as Asia and oil-producing countries in the Middle East emerged with a number of new coronavirus cases, along with the CDC warning the US to prepare for the virus.
Brent lost $11 (2pc) to $53.84 a barrel at 13:22.
Goldman Sachs has reduced its 2020 demand for oil growth forecast from 1.2 million bpd to 600,000 bpd, and lowered its Brent forecast to $60/ barrel from $63.
Opec+ is due to meet in Vienna from March 5-6. Saudi Arabia supports further cuts in oil production as a result of weak demand due to the coronavirus crisis. However, Russia has remained silent regarding its decision.
While the meeting may result in supply cuts, analysts believe that the impact is to be negligible considering demand-side concerns having a greater sway on the market.
The International Energy Agency’s outlook on global oil demand growth has reached a decade wide low and is likely to fall lower as a result of coronavirus.
This sell-off pressure is further accelerated by the CDC warning the US to prepare for the virus.
The API reported yesterday that crude inventories rose by 1.3 million barrels in the week to February 21, to 4.2 million barrels, below the expectations for a build of 2 million barrels.