Zhongxin Jingwei Client, February 28th. According to Reuters's Chinese website on February 28th, oil prices fell for the fifth day on Thursday, hitting the lowest level in more than a year. The rise in new confirmed cases of the new crown virus in the world has heightened market concerns and people are worried about the epidemic Once it becomes an epidemic, it could lead to a slowdown in global economic growth and crack down on crude oil demand.
Brent crude oil futures fell by $ 1.25, a drop of 2.3%, and the settlement price was reported at $ 52.18 per barrel. The intraday low was $ 50.97 a barrel, the lowest since December 2018; U.S. crude oil futures fell by $ 1.64, a drop of 3.4%. It closed at US $ 47.09 per barrel, hitting its lowest level since January 2019.
The report said that the trading in the oil market showed that investors expected that the oversupply would continue for a long time. As the epidemic spread to large economies such as South Korea, Japan and Italy, demand was damaged.
OANDA senior market analyst Edward Moya said, "Intensified global isolation measures will cause severe damage to demand in the next few quarters, and oil prices will fall freely."
It is reported that the oil market is concerned about the situation of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia (OPEC +), which may further reduce production. OPEC + is scheduled to meet in Vienna from March 5th to March 6th. The organization is currently implementing an agreement to reduce output by about 1.2 million barrels per day to support oil prices.
Consulting firm Fact Global Energy predicts that due to the epidemic, oil demand will increase by 60,000 barrels per day in 2020, which the company called "almost zero."
President of the International Monetary Fund (IMF) Georgiyeva warned at the G20 finance leaders' meeting in Riyadh that the economic growth forecast is expected to be lowered. She said in a statement that the new crown epidemic is expected to reduce global economic growth by 0.1 percentage point.
U.S. gasoline futures tumbled 5.5% to $ 1.3742 a gallon, the lowest since the end of January 2019. Heating oil futures fell about 0.7%, and the settlement price was reported at $ 1.4892 per gallon, hitting its lowest level since July 2017.
Brent crude oil and U.S. crude oil's December 2020 / December 2021 contract spreads are both in deep discount areas. This popular spread trade is used as a barometer to measure supply expectations. Both of the above price spreads have reached their widest levels since January 2019, indicating that lower demand may cause oversupply in the oil market before the end of this year.
The report also said that the global stock market has regained its downward trend, and the market value of this week alone has evaporated more than 3 trillion US dollars. (Zhongxin Jingwei APP)