The oil price fell sharply on Monday for fear of the corona virus. The outbreak of that disease in Asia may depress fuel demand. Saudi Arabia said it was keeping a close eye on the situation but still seeing little difference in the demand for oil.
The price of a barrel of oil (Brent) fell 2.2% early Monday morning and cost $ 59.37 per barrel after China announced new contagion rates.
Analysts expect the virus outbreak to bother the Chinese economy for some time. Companies there will stay closed for longer now that the Chinese government has extended the holiday around the Chinese New Year. However, the oil prices react excessively. Traders think the market experts are preparing for the worst case.
Saudi oil minister Abdulaziz bin Salman says he is keeping a close eye on the situation. He compares the situation with the outbreak of the SARS virus in 2003 when the same form of “extreme pessimism” got hold of on the market. Even then, according to Bin Salman, “there was no significant decrease in global demand for oil.”
Abaigael Schlomski is an accomplished economist and financial journalist with over a decade of experience in the industry. He is a regular contributor to EconomicInform, where he provides in-depth analysis and expert commentary on the latest economic trends and events. With a keen understanding of the financial markets and a talent for breaking down complex economic concepts for a general audience, Maurice is a trusted and respected voice in the field.