The coronavirus pandemic continues to wreak havoc on the global economy. Due to businesses closing down, tourism halting, and multiple flights being cancelled around the world, there is an ever more pronounced decrease in the demand for oil.
However, while lower demand normally pressures oil prices, today we see they are on the way to recovery. The reason for this paradox is that the situation has gotten so bad that Russia and Saudi Arabia are likely to set aside their differences and agree on a deep production cut to stabilize the oil market.
On account of this news, Brent crude increased to $33.98, while the WTI climbed to $26.87 per barrel. Prices can move further upward on Thursday when OPEC+ is scheduled to meet and discuss the production cuts.
Meanwhile, in the United Kingdom, Prime Minister Boris Johnson’s fight with the coronavirus continues. After the first ten days of quarantine, the Prime Minister’s health worsened and yesterday he was hospitalized. He has since been moved to the ICU as his health continues to deteriorate. He is currently in no position to run the country, which is exposing the pound to risk and pushing its value downward.
On the other side of the ocean, the United States still wrestles with the coronavirus. With more than 300,000 cases, the US is the most heavily affected region and has still not reached the peak of infections.
The number of new patients with Covid-19 is also rising in Japan. Prime Minister Shinzo Abe declared a state of national emergency today. Now all eyes will be on the government and the Bank of Japan to see how the crisis is being handled.
