INTERNATIONAL – Brent crude made a new 13-month low on Monday around $53.11 on news that potentially deeper OPEC+ cuts may not occur soon.
The spreads in the futures markets are signalling weaker demand, with the discount on spot prices widening further. This year, Brent crude has dropped by more than 18 percent and by 25 percent from its January peak of $71.75.
2020 was supposed to put an end to the global manufacturing slump after the US and China reached their “phase one” trade agreement.
It was expected that Europe would begin to shine again due to renewed Chinese demand after the signing of the trade deal. But no one expected a coronavirus outbreak that would interrupt economic activity in China and spread globally.
Now it’s no longer a question of whether the coronavirus epidemic will lead to an economic slowdown, but how painful this slowdown will be. The scale of the impact can only be determined when the spread of the virus begins to slowdown and the outbreak gets under control, which is not the case at the moment.