Oil prices reel on the impact of “Corona” fever

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LONDON – A Reuters survey concluded yesterday that oil prices are heading towards stability near the current low levels in the coming months, as the collapse of an agreement between major producers to reduce production harms an already reeling market due to falling demand caused by the Corona virus.
Analysts in the quick opinion poll reduced their expectations for Brent crude prices to $ 42 a barrel on average this year, compared to $ 60.63 on average in the February monthly referendum.
It is expected that the average price of global benchmark crude will reach about $ 34.87 in the second quarter and $ 39.05 in the third quarter before recovering some strength and reaching $ 44.08 in the fourth quarter of the year.
The survey, which included 21 analysts, expects the average US crude price to reach $ 30.37 a barrel in the second quarter and about $ 37 a year for the whole year.
“OPEC is very late and prices are down here on its way to continue for the next two quarters at the very least,” said Edward Moya, chief market analyst at Oanda Brokerage. Brent and WTI will both need to get used to oil prices below $ 30.
Crude futures fell more than 30% last Monday, the largest decline in a single day since the Gulf War in 1991, after the Organization of Petroleum Exporting Countries (OPEC) and its allies, including Russia, failed in the framework of what is known as OPEC, in agreeing to extend Order their production cuts.
This resulted in a Saudi-Russian price war and a race for market share, in which Saudi Arabia reduced the official selling price of its crude grades to all destinations and plans to record production in April.
Meanwhile, American shale oil producers rushed to deepen spending cuts and reduce future production.
The collapse of the OPEC agreement adds to concerns that demand is under pressure due to the rapid global spread of the Corona virus, which has paralyzed supply chains and caused a downturn in financial markets.
It is expected that the global demand for oil will pass its first quarterly decline for the first time since 2009, as most analysts predict a decrease in total global demand between 0.8 million barrels per day and four million barrels per day in the first half of 2020. For the whole year, a slight growth in demand is expected at Between 0.1 and 0.5 million barrels per day.
In stock and bond markets, Bank of America said yesterday that investors exited bonds, stocks and all other major asset classes and pumped money into money instruments in a turbulent week for markets that saw trillions of dollars wiped out amid mounting recession fears due to the outbreak of the Corona virus.
Analysts at Bank of America Merrill Lynch, who analyze weekly data from EPFR, which specializes in tracking flows, said that the money markets recorded inflows of $ 136.9 billion, the largest ever. Investors pulled record flows of $ 25.9 billion from bond funds in the week ending Wednesday.
Global stocks headed towards the worst weekly performance since the financial crisis in 2008, after falling 10% the day before yesterday.
Bank of America said that the “meltdown” in the markets pointed to fears of recession and debt default, leading to forced liquidation on Wall Street and an inefficiency of policies.
Interest rate cuts by many central banks and stimulus measures taken by governments were not sufficient to allay investors ’fears if the economic damage caused by the virus was still difficult to assess. – (agencies)





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