Fitch admits the fall in the price of Brent below $50 due to coronavirus

oil Prices in the near future will be subject to strong volatility due to the influence of the situation of the coronavirus in the market, it is possible the drop in Brent crude below $50 a barrel, said RIA “Novosti” representative of the Agency Fitch Dmitry marinchenko.

Oil prices in January fell by 15% due to the outbreak of the coronavirus in China. So, futures for oil Brent has fallen by 15.5%, at $66 per barrel to levels below $56 at auction in January 31st, and the price of WTI started the year at $61 per barrel, but fell to a point below $51, after losing 16.5 per cent.

“In the near future we can expect big jumps. Depending on how the situation will develop, we cannot exclude that at the time the price of Brent crude may fall below $50” — he said.

However, the expert does not expect that Brent can steadily stay below this mark.

“With a strong surplus on the market OPEC+ will probably cut production. In addition, low prices will lead to a reduction in investment activity on the part of American producers of shale oil,” said marinchenko.

the Expert also noted that the most dangerous scenario for oil prices — if followed by coronavirus, a slowdown in the growth rate of the world economy.