Oil Prices Drop Sharply as Coronavirus Lowers Demand

Oil prices on Monday dropped to their lowest levels in more than a year, reflecting concern about reduced demand from China as the coronavirus outbreak spreads. Responding to the virus’s effect on travel and industry, the Beijing-based China Petroleum & Chemical Corporation (Sinopec), Asia’s largest refiner, cut throughput this month by around 600,000 barrels per day. Brent crude, which at 9:26 am GMT stood at $56.26 per barrel, was earlier in the day selling for $55.42 per barrel – a price not seen since January 2019. Likewise, the price of US West Texas Intermediate hit its lowest mark in the same period – $50.42 per barrel. The Chinese stock market saw losses of $393 billion on Monday, also driven by fears about the virus’s spread. Iranian Oil Minister Bijan Zanganeh called for the stabilization of oil prices. “The oil market is under pressure and prices have dropped to under $60 a barrel and efforts must be made to balance it,” he said. The OPEC+ group, comprising OPEC and its allies, is considering bringing forward to February its upcoming meeting, now scheduled for March, to address the drop in prices. OPEC+’s Joint Technical Committee will assess the virus’s impact at its meeting on February 4-5 in Vienna.