The coronavirus and Oil: Oil demand around the globe could drop to lowest level in a decade

Coronavius and oil - Chinese refinery in Liaoning Province, China
Coronavius and oil - Chinese refinery in Liaoning Province, China

The price of has already been reduced by 20% to $ 55 per barrel.

The (IEA) has predicted in a report that the outbreak of will “significantly” affect global oil .

According to the IEA, during the first quarter the for crude oil is expected to fall by 435,000 barrels per day, due to the slowdown in the Chinese caused by (covid-19) which is the lowest in more than a decade.

In addition, the growth forecast for this 2020 has been reduced to 825,000 barrels per day, 365,000 barrels per day less than expected, representing the lowest levels since 2011.

The effects of the epidemic on oil prices have already become apparent. In this sense, the price of Brent oil, which is used as a frame of reference, has decreased by 20%, reaching $ 55 per barrel.

Before the outbreak of the , the world oil market was expected to balance during the second half of the year as a result of a cut in production, increased and a decrease in supply outside the Organization of Exporting Countries of ().

However, and its allies have now decided to take as an emergency measure an additional cut in production of 600,000 million barrels per day, which will add to the 1.7 million barrels initially planned.

The effect of the covid-19 crisis on the in general means that it will be difficult for consumers to benefit from the reduction in oil prices.

concludes the IEA report.

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