Crude oil prices fall due to spread of infection

Crude oil prices drop due to spread of infection Oil-producing countries discuss reduction of production from 5 March 6:01

While crude oil prices have fallen sharply due to the spread of the new coronavirus infection, major oil-producing countries such as Saudi Arabia have decided to hold a meeting on May 5 to discuss measures to support crude oil prices. The focus is on how to scale down the production.

The spread of the new coronavirus has caused economic activity, especially in China, to stagnate, and demand for crude oil is expected to decline. As a result, international crude oil prices have fallen by more than 20%.

Oil-producing nations that rely on crude oil for their revenues and the country's economy are worried about this situation. We will discuss the response in Vienna, Austria, where our headquarters is located.

Prior to this, representatives from major oil-producing countries made preliminary adjustments at OPEC headquarters on April 4. For three years, these oil-producing countries have been collaborating to keep crude oil prices high and cut down on production.

Currently, the company aims to reduce 1.7 million barrels per day, which is 1.7% of global demand, but the recent sharp decline has focused on increasing the scale of the reduction.

However, as the spread of the new coronavirus spreads to countries other than China, such as Asia and Europe, it is not clear how far crude oil demand will decline in the future.

For this reason, it is unclear whether the price will stop falling even if a decision is made to further reduce production, and oil-producing countries will have to make difficult decisions.

Minimal delegations, no press

Oil-producing countries' meetings have been held regularly at OPEC's headquarters in Vienna, Austria, where media from around the world gather to film discussions, interview interviews with delegates from various countries and hold press conferences. I went to the interview.

However, the OPEC Secretariat has decided not to allow press to enter the headquarters building at this meeting, following the spread of the new coronavirus.

The Secretariat says that this is to avoid the risk of infection when many people gather in one place. He also called on the countries attending the meeting to minimize the size of the delegation.

The video of the meeting will be distributed on the Internet, so it will be held in an unusual way.

Crude oil prices continue to fall due to spread of infection

International oil prices have continued to decline due to the spread of the new coronavirus infection.

The price of North Sea crude oil being traded on the London market was initially in the $ 66 range per barrel, rising as tensions in the Middle East increased as the United States killed a commander in Iran. .

However, as the spread of the new coronavirus in China became serious, crude oil prices began to decline. China is the world's largest importer of crude oil, and stagnant economic activity in China is expected to reduce demand for crude oil.

In addition, the spread of infections outside of China has heightened concerns about falling demand, which dropped to around $ 50 at the end of last month, a drop of more than 20% from the beginning. . Especially in the last week, it dropped 13.6% in a week.

WTI futures prices in the New York market also dropped sharply from the initial $ 61 level to the $ 43 level for a time.