Oil prices records its worst January month since 1991 because of coronavirus

Oil Prices Coronavirus
Oil Prices Coronavirus

Prices have been affected by the prospect that the demand for crude oil will decrease due to the outbreak of a disease that has already claimed the lives of more than 200 people.

The main mixtures of crude oil in the world had their worst January since 1991, pressured to fear that demand for energy will be affected by the spread of China’s coronavirus .

During the first month of the year, the WTI accumulated losses of 15.14 percent that placed it at 51.56 dollars per barrel this Friday, while the Brent in London fell 13.28 percent , to 58.16 dollars per barrel, according to Bloomberg data on contracts as of March 2020 .

29 years ago, these energy companies accumulated setbacks of 24.26 percent and 29.04 percent, respectively.

The expectation of a decrease in the demand for energy is due to the outbreak of the virus just before the celebration of the Chinese New Year , a holiday in which there is the largest mass migration in the world.

The emergence of the virus caused at least 17 cities in the country to restrict their mobility, preventing the free transit of at least 50 million people.

Investors have been cautious about fears that this virus will further slow down China’s economic growth.

The virus has similar characteristics to Acute and Severe Respiratory Syndrome (SARS), so markets began to speculate that the Chinese economy could slow its annual growth to 5 percent, which is equivalent to one point. percentage below the growth of 2019.

In 2003, the SARS outbreak negatively affected China’s GDP by about 1 percent. Since then, China’s contribution to global GDP has gone from 4 percent to 17 percent.

Members of the Organization of the Petroleum Exporting Countries (OPEC) are considering holding an emergency meeting next month. Saudi Arabia is one of the biggest interested in this meeting, as prices fell to a minimum of six months . Russia, which initially rejected this request, is now ready to hold the meeting.

OPEC is considering deepening production brakes by approximately 500,000 barrels per day.

In the case of the Mexican export oil sample, the drop has been 13.84 percent, at $ 48.37 per barrel until Thursday.

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