WTI crude oil was down 30 cents for the day, dropping down to $52.60 per barrel. It is down almost 1.8% for the day, and almost 14% for the month of January, continuing the downward trend.
This is a stark change from the beginning of the month, when oil prices peaked at above $63.50, the highest they had been since April 2019.
BlackBull Markets’ Anish Lal had the following to say regarding the movement of WTI crude:
“Crude Oil, commonly known as Black Gold, has been under extreme pressure in the wake of the Virus, as investors begin to price in slowing global growth based on the potential economic impacts from slowing demand in China. Traders should find strong support just sub the $51 mark, and a move into this zone will be key in depicting future direction. A break below this key support level could see lows from November 2018 sub the $50 price range.”
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Many assets have been impacted by the continued spread of the coronavirus in China, but crude oil has experienced one of the biggest drops. Crude oil is the world’s most actively traded commodity, with China being one of the largest buyers.
The latest news on the coronavirus sees 170 confirmed dead, with over 7,700 confirmed cases. With no cure yet been found, prices are expected to continue to drop as the infection spreads. Various countries are scrambling to evacuate their citizens from Wuhan, including Japan, Australia, and New Zealand.
The World Health Organisation will be meeting tomorrow, in order to discuss whether or not to establish a global health emergency regarding the virus. This decision comes with the latest news of 3 countries- Japan, Germany, and Vietnam- all reporting limited human-to-human transmission.
While the number of cases continues to escalate in China, there has been no sustained growth in infections in other countries. There have also been no deaths caused by the virus in any other country outside of China.
Sources: BBC, statnews.com