WTI Crude Oil Posts Third Consecutive Day of Gains as OPEC Supply Cuts Loom
On Thursday, WTI crude oil prices continue to climb higher for the third consecutive day as hopes rise for OPEC and allies to implement deeper curbs in crude production to offset the impact of the coronavirus outbreak. At the time of writing, WTI crude oil is trading at around $51.31 per barrel.
The OPEC+, including Russia, are expected to announce an additional 600k bpd cut in crude supply, taking the total curbs up to 1.7 million bpd. The deeper cuts have been proposed to counter the declining demand for crude oil as a result of the coronavirus outbreak, which has caused a shutdown of factories in China as well as a cut in international flights to and from China.
The leading oil producers of the world have also revised oil demand growth forecasts for this year lower in the wake of the spreading epidemic. According to the OPEC, demand for its oil is expected to reduce by 200k bpd in 2020, driven lower by a possible weakness in China’s economic growth.
So far, the coronavirus has already caused WTI prices to fall by over 20% from the highs touched during January. The death toll from the virus has exceeded 1,300 so far while new cases have soared to over 48,000 in China.
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