Brent oil reaches $50

Brent oil reaches $50

Oil prices have continued plunging on Friday as the spread of coronavirus worldwide keeps global oil demand low.

International Brent crude was trading at $50.22 per barrel at 0600 GMT on the ICE Exchange in London on Friday for a 1.57% loss after closing Thursday at $51.02 a barrel when it saw a daily decline of 4.51%.

American benchmark West Texas Intermediate (WTI) was trading at $45.67 a barrel at the same time for a 2.43% decrease after ending the previous session at $46.81 per barrel with a 2.63% loss.

For the last time Brent crude dipped below the $50 a barrel mark in summer 2017, TASS recalls.

The meeting of OPEC and OPEC+ is scheduled for March 5-6.

A senior analyst of 'Uralsib', Alexei Kokin, speaking to Vestnik Kavkaza, noted that the current drop in prices is due to increased risks of a fall in demand in the coming months. "The coronavirus epidemic involves more and more countries in negative demand forecasts. First, oil prices have started declining in anticipation of falling demand in China, then certain risks appeared for demand in Korea and Japan. Now, risks arose in Europe and the U.S., the world's first oil consumer," he explained.

According to the expert, the updated OPEC+ deal may affect the situation. "The market does not yet know the decisions adopted at the OPEC + meeting, what will be Russia's position, there is uncertainty. Therefore, the market hasn't yet taken this factor into account. But, for example, Russia's consent to reduce its quota by at least 600 thousand barrels per day can positively affect prices. In general, the further situation will strongly depend on the fight against the epidemic and on the OPEC+ decision. We should not expect Brent prices to return to the range of $55-60 per barrel sooner than summer," Alexey Kokin warned.