The outlook regarding global oil demand remains quite pessimistic. After both the United States and OPEC shared prognosis of a sharp decline in demand due to China’s current struggles, now the International Energy Agency confirmed the same. In fact, the IEA’s report is the most pessimistic among the three.
Shortly after the announcement, oil prices dropped once again to $55.23 and $50.86 per barrel for the Brent and WTI futures, respectively.
Meanwhile, the Chinese coronavirus, also known as the Covid-19 virus, continues to play a vital part in shaping the financial markets. China once more changed the way it counts those affected and now the cases are no longer declining, while the number of deaths also continues rising. Moreover, nearby Singapore is emerging as the country with most deaths besides China with 50 victims currently.
The entire provide on Hubei, where the virus outbreak began, remains offline, with factories still closed due to the high contagion risks. Elsewhere in China businesses have been trying to go back to normal, but many still operate at limited capacity, which has a negative effect on the Chinese economy.
For now, it appears that the central banks around the world are not too worried about the financial impact of the virus outside of China. Canada and the United States have affirmed that they will not be softening their monetary policies just yet. In Europe the mood was the most pessimistic, as the eurozone’s economy is in a tight spot right now. Due to the EU’s close trade relationship with China, economists predict a further slump in growth until the threat is eliminated.
