Coronavirus and oil: Why crude has been hit hard

Sun Online Desk

4th February, 2020 03:29:41 printer

Coronavirus and oil: Why crude has been hit hard


The world's biggest oil producers could be about to slash output as they grapple with the fallout of the coronavirus, reports BBC.

Representatives of oil producers' cartel Opec and its allies are expected to meet this week as calls grow for action to support oil prices.

The cost of crude hit its lowest level in a year after falling 20% since its peak in January.

Why have global oil prices fallen so much?

As the Lunar New Year holiday has been extended in much of China and travel restrictions are in place factories, offices and shops remain shut.

That means the world's biggest importer of crude oil, which usually consumes about 14 million barrels a day, needs a lot less oil to power machinery, fuel vehicles, and keep the lights on.

The outbreak is likely to have a particularly large impact on demand for jet fuel as airlines around the world suspend flights to China, and travel restrictions within the country mean far fewer flights.