West Texas Intermediate crude futures were below $50 per barrel in late trading Monday, after closing at $50.11, a decline of 23.7% from its Jan. 8 intraday high of $65.65 per barrel. WTI first fell more than 20% from that level on Jan. 27 on an intraday basis, putting it in a bear market, according to Refinitiv data. Brent crude prices plunged nearly 4% Monday and was down 24% from its January high, when it closed at $54.45 per barrel.
Fears the virus could impact cruise ship bookings or even curb cruises has been hanging over the travel industry, after airlines cut back on flights to China. Transportation in major Chinese cities has been shut down, and Chinese flights have been grounded. Citigroup energy analysts sliced their price expectations for crude from the high $60s for Brent this year to the $50s, including an average of $54 for the first quarter and $50 for the second quarter. They said Brent could touch as low as $47. The analysts expect Brent to return to $58 by the fourth quarter and then slide to $53 in 2021.
They said demand could fall by 1 million barrels a day in the first quarter, given the much larger size of China's economy and oil demand now, compared to during the SARS outbreak in 2003. Even with 1 million barrels a day of Libyan oil off the market, the world is still well supplied as demand dries up. In the U.S., gasoline demand has slipped but the U.S. industry continues to see solid exports, with oil exports of about 3.5 million barrels a day.
Corona virus stops climate change
Let’s keep working to bring our demand for oil down! This is the only way we can hit them where they live. Green energy IS making a difference. Slowly, yes, but it is working.
Time to buy