Saudi Arabia, UAE Caution Oil Market Against Gloom over China Virus

OILMONSTER.COM- Saudi Arabia, the world’s top oil exporter, urged caution on Monday against “gloomy expectations” regarding the possible impact of the spread of the coronavirus on the global economy and oil demand.

The death toll from the coronavirus outbreak in China rose to 81 with more than 2,700 infected, while health authorities around the world stepped up screening of passengers from China.

Crude prices fell about 3% on the day as the rising number of cases and China’s city lockdowns and extension of its Lunar New Year holiday deepened concerns over oil demand.

But Saudi Energy Minister Prince Abdulaziz bin Salman said the impact being seen on oil and other markets was “primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite its very limited impact on global oil demand.

“Such extreme pessimism occurred back in 2003 during the SARS outbreak, though it did not cause a significant reduction in oil demand,” the minister said in a statement.

Fellow Gulf OPEC oil producer United Arab Emirates echoed the Saudi minister’s comments.

“It is important that we do not exaggerate projections related to future decreases in oil demand due to events in China,” UAE Minister of Energy Suhail al-Mazrouei said.

“OPEC and OPEC+ member countries will discuss market conditions (in March) and, if required, all options to ensure continued market balance,” he said.

Courtesy: www.reuters.com