Oil Prices Slide to Lowest Levels Witnessed Since Mid-2017
Oil prices continued their precipitous slide on Friday, even as OPEC unveiled plans on Thursday to cut oil production by 1 million barrels per day through till the end of 2020. In addition, OPEC continues to also seek cooperation from the other nations that form part of the OPEC+ group of producers led by Russia, with the aim of cutting a further 500,000 barrels per day of production. But Russia has thus far refused to commit to any further reduction in output, only agreeing to an extension of previously agreed cuts by OPEC and its allies.
In a statement released on Thursday, OPEC stated that global oil demand is now forecast to grow by only 480,000 barrels per day in 2020, down from its previous estimate of a 1.1 million barrel per day increase for the year that it had forecast in December. Several other industry analysts, however, have predicted that global oil demand might actually fall this year for the first time in over a decade since the financial crisis of 2008.
Brent crude futures slipped to below US$48 per barrel on Friday following a global sell-off across financial and commodity markets caused by the spread of the Coronavirus infection globally. WTI crude futures dropped below US$44 per barrel, the lowest level they have witnessed since mid-2017. The virus outbreak has led to widespread panic, as offices, schools and factories have been shut down in several countries to prevent the spread of the infection, and airlines have been forced to cancel flights due to a steep drop in international business and tourist travel.