The novel coronavirus has not had a dramatic effect on energy markets, US Energy Secretary Dan Brouillette said on Friday, according to Reuters, though the effect on the market could worsen if the virus continues to spread, he added.
“I think the impact has been marginal,” Brouillette said.
But the oil price slide since the beginning of the year—trigged by the coronavirus epidemic—indeed has been dramatic. The price of a WTI barrel that was trading at $62.70 just one month ago is now trading at $50.45 per barrel—a drop of more than $12 per barrel, or nearly 20%, in just 30 days.
The price of a Brent barrel, trading at $68.91 a month ago, has sunk to $54.52 today, a drop of over $14 per barrel, or nearly 21%.
And it’s more than just fearful trades.
Earlier this week, anonymous Chinese officials said that China’s oil demand had fallen by 20% compared to what is typical for the season—a figure that represents 3 million barrels per day, and more than all the oil produced in the Bakken and Eagle Ford basins on a daily basis combined.
OPEC, too, feels that the effects have been dramatic enough to hold an emergency meeting to discuss the possibility of deeper or longer production cuts, even as OPEC member Libya is already producing 1 million bpd under its typical amount.
The death toll from the coronavirus has risen to 638, with all but two of them limited to China. More than 31,000 people have been affected.
Controversy surrounding China’s handling of the virus swelled on Friday, after the Chinese doctor who tried to sound the alarm about the virus in December died this week from the virus. Police in China had previously silenced the doctor and took him in for questioning, forcing him to write a statement admitting illegal behavior, according to media reports. The online anger surrounding the handling of the whistleblower and his death has been too much for China to censor.
By Julianne Geiger for Oilprice.com
