Oil may hit $40 if Russia doesn’t support Opec’s production cuts
In a volatile trading last week, crude oil prices touched one-month high and then fell back as coronavirus fears were back in the markets, with infection and death tolls rising in South Korea, Italy and the Middle East.
The coronavirus epidemic is battering economic activity and global oil demand, sending oil prices into a tailspin. Major oil-producing countries and companies have been gradually adjusting to the reality of declining global demand in the mid to long term.
On the data front, Japan’s economy shrank 1.6 per cent in the fourth quarter of 2019. The decline from the third quarter was the biggest contraction since 2014. The drop was even more severe – a 6.3% plunge – when measured as an annualised rate.
The markets were underestimating the effects of the virus, but now it is creating a sudden demand shock.
