Following the outbreak of the Coronavirus in China oil prices hit lows of $53, the lowest levels in 12 months, following a 20% drop in the market. This drop in the oil price fuelled the bearish (downward) sentiments in Gas and Electric markets.
China accounted for 13% of global oil demand in 2019, making it one of the world’s largest oil consumers. Following the Coronavirus outbreak on 31st December, oil demand from China has reduced significantly as factories, offices, and shops remained closed and production output falls. OPEC (Organisation of Petroleum Exporting Countries) and Russia are expected to go ahead with deep supply cuts in order to counteract the drop in demand and support prices.
Oil prices have begun to recover, currently trading at $55 per barrel (at the time of writing), however the full effect of the Coronavirus outbreak is yet to be seen as demand is still being affected.
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