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Oil prices have dropped after the Organization of Petroleum Exporting Countries (OPEC) and the International Energy Agency (IEA) predicted a decline in demand in their annual fuel outlook reports for 2020.
IEA expects oil demand to fall in the first quarter of 2020 before rebounding in the second quarter. It cut its full-year global growth forecast to 825,000 barrels per day (bpd).
OPEC has also lowered its 2020 demand forecast, cutting crude by 200,000bpd.
Experts anticipate that the OPEC+ group will agree to further cuts during their next meeting, which may take place this month.
According to Reuters, Brent crude futures were down by $0.65 to $55.14 per barrel. US West Texas Intermediate (WTI) futures rose $0.39 to $50.78 a barrel.
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By GlobalDataBNP Paribas analyst Harry Tchilinguirian told the Reuters Global Oil Forum: “(It’s) worth noting that these forecasters are for now assuming a V-shape recovery in oil demand, with the bulk of the impairment concentrated in Q1 2020.”
Travel bans and quarantines to and from China due to the coronavirus outbreak have also harmed fuel demand.
Chinese oil refiner China National Chemical Corp said that it will close a 100,000bpd plant. It will also cut processing at two other facilities due to falling fuel demand.
According to the Energy Information Administration (EIA), the US crude stockpile increased by 7.5 million barrels. It now sits at 442.5 million barrels.
Meanwhile, the World Health Organisation (WHO) has officially named the new strain of coronavirus ‘Covid-19’.
The death toll from the virus has reached 1,369, including the one reported in the Philippines. Cases of infection have increased to 60,300 globally as of the end of 12 February, an increase of 254 new deaths from the day before.