On Thursday, oil showed a big drop due to a slowdown in the global economy and a possible decrease in demand. However, on Friday, the market turned around and began to grow.
After 8 a.m., Moscow time, March contracts for European Brent crude oil (traded on the London Stock Exchange) grew 30 cents and cost $ 62.3. Let’s recall that on Thursday the futures lost more than a dollar, closing at around $ 62.
At the same time, oil futures of the American standard WTI crude oil (traded on NYMEX) rose to 55.85 US dollars per barrel. On Thursday, they lost 2%, closing at 55.6 dollars per barrel.
According to the data provided by Dow Jones, on Thursday, Brent was at its lowest level since early December. WTI price was as low as it was in late November.
At the end of the week, Chinese authorities decided to close 13 cities. This was done to control the spread of the new coronavirus. 850 cases of pneumonia have already been reported. There are also 25 victims of the epidemic. 11 cases were recorded outside the PRC. The countries such as the United States, Thailand, Japan, South Korea and Singapore are under threat.
Experts note that there is no big threat to oil demand yet. However, the measures of the Chinese authorities to restrict travel of the population may result in a decrease in economic activity in the country. It is obvious that tourism and migration processes will decrease. In the future, all these negative consequences will affect the demand in the oil market.
The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group