Daily News Egypt

Oil sees 4th weekly decline; Brent crude falls to $56.66/barrel amid Coronavirus fears

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Oil sees 4th weekly decline; Brent crude falls to $56.66/barrel amid Coronavirus fears

OPEC expedites its meeting to deal with falling global demand for crude oil

International benchmark Brent crude price fell to $56.65 a barrel, compared to about $66 last month, recording its fourth consecutive weekly loss, as concerns grow about the potential economic damage to the outbreak of Coronavirus, which spread from China to about 20 countries and killed over 250 people.

A source in the petroleum sector told Daily News Egypt that the fluctuations of oil prices in international markets do not affect the local market, since the Egyptian government hedged against the fluctuations in international oil prices with the liberalisation of petroleum products locally.

He stressed that oil prices are totally unstable in light of the political unrest in the region and the outbreak of Coronavirus in some countries, and the decline in demand for oil in the markets with the precautionary measures taken by several countries in various activities, such as tourism, industry, and trade.

Oil prices found support for a short period after Russian Energy Minister Alexander Novak said his country is ready to move the date of the Organization of Petroleum Exporting Countries (OPEC) meeting for this month instead of March, to deal with a possible decline in global oil demand due to the deadly virus.

He explained that the Egyptian government will review its hedging mechanism with JP Morgan and Citibank by March, as it updates the value of hedging contracts every three months, and sets the value according to market expectations and global changes.

The automatic pricing committee for petroleum products recently decided to fix the sale price of all three types of gasoline products in the local market until March, at EGP 6.5 per litre for gasoline 80, EGP 7.75 per litre for gasoline 92, and EGP 8.75 per litre for gasoline 95.

The Committee also decided to keep the diesel price at EGP 6.75 per litre and fix the price of fuel oil for non-electricity and bakery uses at EGP 4,250 per tonne, in light of the fixed cost of selling and making those petroleum products available in the local market.

The Committee reviews reviews and determines the prices of some petroleum products on a quarterly basis, with the exception of butane and petroleum products used by the electricity and bakery sectors.

The US Energy Information Administration said that crude oil stocks in the United States increased, as did gasoline stocks, while distillate stocks decreased.

Crude inventories rose by 3.5m barrels in January to reach 431.7m barrels, compared to analysts’ expectations in a Reuters poll, with an increase of 482,000 barrels.

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