Global oil benchmark, Brent Crude, finally slipped below the $50 per barrel mark on Friday after declining by as much as 3.85%. It is currently trading at $49.74 per barrel according to Oilprice.com.
This comes as the Coronavirus pandemic continues to spread throughout the world whilst grounding some economies (like China) to a halt. Nigeria confirmed its first case today, making this the third reported case in Africa besides the one already reported in Egypt and Algeria.
The decline in Brent Crude has also intensified speculation that the Organisation of Petroleum Exporting Countries (OPEC) and its allies may now have no choice but to quickly reach a decision on a new output cut that will support oil prices.
According to Bloomberg, OPEC had already noted its commitment to reach a new output cut due to the negative impacts the Coronavirus has had on oil prices. Saudi Arabia has reportedly been pushing deeper cuts in the last few weeks, although Russia (an OPEC+ member) has been more cautious on the matter.
In the meantime, the international oil market is shrouded in uncertainty. The Chairman of Facts Global Energy (FGE), Fereidun Fesharaki, recently said:
“I have never known so much uncertainty in the oil market — and especially so many large uncertainties.”