Oil demand in China fell by 20% due to coronavirus

Moscow, February 3 – “News.Economy.” Oil demand in China fell by about 3 million barrels per day, which is about 20% of total consumption, on the background of the spread of coronavirus, reports Bloomberg.

Photo: EPA

Traditionally, during the celebration of the New year according to the Lunar calendar, the demand for oil increases, including, due to the growth of consumption of aviation fuel in a more active tourism.

This is the most serious shock to demand since the financial crisis of 2008-2009 and most sudden drop since the terrorist attacks of 11 September 2001.

In this situation, the oil market needs the help of OPEC and its allies, who plan to spend 4-5 February an extraordinary meeting of the technical Committee, according to sources of Bloomberg.

For the Ministerial meeting in February discussed the potential date of February 8-9 and February 14-15, although agreed, remains the ordinary meeting of 5-6 March.

Earlier it was planned that a meeting of techamerica will take place just before the March meeting of OPEC Ministers+

In China as of 00:00 hours local time Monday (19:00 GMT Sunday), the number of cases of pneumonia caused by a new type of coronavirus, was 17 thousand 205 people, with a fatal outcome was recorded in 361 of the case, according to the state Committee of China for health.

“Obviously, the situation in China was “black Swan” for the oil market. Prior to the outbreak of pneumonia was still some hope for increased demand, but now they are gone, – said the partner of Again Capital LLC in new York, John Kilduff. – OPEC+ should respond. If further production cuts will not happen, oil prices continue to fall”.

China has become the world’s largest importer of oil in 2016, when he toured the United States. Consumedie oil in China is about 14 million barrels per day (b/d), equivalent to the total demands of France, Germany, Italy, Spain, UK, Japan and South Korea.

the Brent Price fell more than 10% since January 20, after the growth of the epidemics of pneumonia in China. In January Brent fell by 12%, WTI – by 16.3%, the fastest rate since may.

the Cost of the April futures for Brent crude on London’s ICE Futures exchange at 10:15 GMT is $56,14 per barrel, or $0,48 (0,85%) below the price of closing of previous session. Futures for WTI crude oil for March in electronic trading on the new York Mercantile exchange (NYMEX) by this time cheaper is 0.16 (0.31 percent) to $51.4 per barrel.

Reduction in oil demand in China is beginning to affect the global energy market. So, shipments of Latin American crude to China stopped last week, supply from West Africa – has slowed, traders said.

the Chinese oil companies, faced with a lack of demand for oil products stockpiling their products and in a short time can exhaust the limits of the repositories.

If this happens, they will be forced to reduce production of petroleum products. According to one source, the reduction of production could reach 15-20%.

Sinopec Group, the largest oil refining company of China, preparing to reduce production by 13-15%, and will make a decision about the necessity of these measures on 9 February. Text: News.Economy