Oil Prices Hit 12-Month Low as Demand Projections Remain Weak
Oil prices hit a 1-year low at the beginning of this week, as Chinese oil demand forecasts continue to be hit hard by the impact of the spreading Coronavirus epidemic, which has now claimed more than 1,000 lives against over 42,000 reported cases. The near-month contract for Brent dropped to below US$54 per barrel on Monday for the first time since December 2018, with the WTI contract also touching a 12-month low of just below US$50 per barrel. Prices have weakened further since the OPEC+ group of producers also failed to deliver additional production cuts after an emergency meeting was held in Vienna last week at which Russia announced that it needed more time to fully assess the impact of the virus outbreak. Further clarity on the global demand scenario will come from the release of the U.S. Energy Information Administration (EIA) Short-Term Energy Outlook report due to be published on Tuesday, followed by the release of monthly oil reports from OPEC and the International Energy Agency (IEA) later in the week.