[size=36]Oil is declining again as demand is hit by the Corona Virus and the price war continues[/size]
Oil fell on Monday with the failure of an emergency cut from the Federal Reserve (the US central bank) to interest rates in calming the global financial markets afflicted by panic from the rapid spread of the Corona virus, while adding a price war between major producers to a growing supply glut.
Brent crude fell 2.07 dollars to 31.78 dollars a barrel by 0729 GMT, to continue a decrease of 25 percent recorded last week in the largest weekly decline since 2008. And opened a month contract closest benefit to rise, recording 35.84 dollars, but fell to a low level of 31.63 dollars.
And US crude fell $ 1.38 to $ 30.35 a barrel after falling to below $ thirty a barrel earlier in the session despite US President Donald Trump's pledge to fill the strategic oil reserve “from the end” in the world's largest crude consumer.
"While this helps marginally, the policy regarding (the Strategic Petroleum Reserve) is dwindling compared to a market afflicted with the Coronavirus, a measure measured in months and compared to a price war that is expected to continue for several or more seasons," said Michael Tran, analyst at RBC Capital Markets. .
Tran explained that the strategic oil reserve stocks are 634 million barrels, which is only about 80 million barrels less than the capacity of 714 million barrels, and purchases from the government will only withdraw a global surplus for about 20 days, which is estimated by RBC. It amounts to four million barrels per day.
The US central bank cut its target range for interest rates to near zero on Sunday in the second emergency cut this month, adding that it will raise its budget by at least $ 700 billion in the coming weeks in an attempt to calm tensions in the financial markets.
Oil prices came under enormous pressure on the demand and supply side, as fears of the spread of the Corona epidemic negatively affected demand, while fears of increasing supplies increased after Saudi Arabia raised its production and lowered prices to increase sales to Asia and Europe.
This came after OPEC and Russia this month failed to extend an agreement to cut production that had been supporting prices since 2016. Ended 29 / s