Oil prices on March 16 fell below $30 a barrel due to coronavirus outbreak that has affected the global economy and slowed down the growth. According to reports, brent crude fell by $3.80 a barrel to settle at $30.05, while the international benchmark fell as low as $29.52, lowest since January 2016. The lower oil prices in the international market are a result of the price war between top producers Saudi Arabia and Russia.
As per reports, Russia and Saudi Arabia failed to agree on a plan to curb supply at the recently concluded OPEC meet, following which both the countries boosted the output to a record level. Media reports suggest that the flood of supply coming from Saudi Arabia and Russia could lead to the largest surplus of crude in history. As per reports, an OPEC meet planned for Wednesday in Vienna has been called off after Saudi Arabia and Russia failed to reach an agreement.
US President Donald Trump on March 13 had said that Washington would take advantage of low oil prices to fill emergency crude oil reserves. India also took advantage of the low oil prices in the international market as the government raised excise duty on fuel by Rs 3 per litre. Central banks all over the world took action to prevent the economic fall out with US Federal Reserves on March 15 slashing its key rates to near zero. However, the measures did little to strengthen stock markets in freefall, as investors anticipate a sharp contraction in demand in the coming weeks anyway.
The oil prices are also being affected by the economic slowdown due to coronavirus outbreak which has claimed more than 7,100 lives across the world and has infected over 1,82,000 people globally since it first broke out in December 2019. China is the most affected country in the world as experts believe that the virus originated from a seafood market in Wuhan city, the epicentre of the disease, where animals were reportedly being traded illegally.