The fear that the spread of the Covid-19 coronavirus epidemic outside of China will become a global pandemic has caused falls of more than 3% in the price of a barrel of oil, which was quoted at a minimum since the beginning of February, in anticipation of that global demand is weighed down by the virus, while refuge assets such as gold or palladium escalated to new highs.
In the case of Brent quality crude, which is a reference for the Old Continent, the price of the barrel stood at 56.41 dollars in mid-session, after having reached the bottom of the 56 dollars level, a 3, 6% below the previous close.
On the other hand, the price of the barrel of West Texas oil, of reference for the United States, was quoted at $ 51.36, compared to $ 53.38 at the end of the last session.
So far this year, the price of the barrel of Brent has fallen by more than 14%, while that of Texas falls by almost 16%.
Russia and Saudi Arabia plan to address the current situation of the oil market at the next meeting of the Organization of Petroleum Exporting Countries (OPEC), which will take place on March 5 and 6 in Vienna (Austria).
During the OPEC conclave and its allies, countries will discuss the duration of their oil production cut-off pact, which entered into force in January 2017 and has been renewed several times since then. In this regard, the technical committee of the pact has recommended extending the cuts until the end of the year, as well as increasing their amount, due to the impact of the coronavirus on crude oil prices and world oil demand.
In fact, the International Energy Agency (IEA) warned in its latest bulletin that the coronavirus epidemic and its impact on the Chinese economy, where many companies have been forced to extend the closures initiated last month by the Lunar New Year vacations have caused a 435,000 barrel decline in daily oil demand in the first quarter of 2020, the first drop in world crude oil consumption since the Great Recession in 2009.
Parallel to the depression of oil prices, the price of gold has registered a renewed euphoria, which has allowed its highest price to be reached per ounce since 2013, close to $ 1,700. At mid-session, the spot price of an ounce of gold stood at $ 1,682.40, up 2.4% from the last close.
Likewise, the palladium rally continues with a rise of almost 1% on Monday, to a maximum of $ 2,733.37 from the $ 2,709.92 of last Friday’s close.