Fear of spread of coronavirus causes oil prices to fall

Fear of spread of coronavirus causes oil prices to fall

- The continuous spread of the coronavirus has led to global fears among investors and led to a slump in oil prices

- On Monday, February 24, 2020, oil prices reduced by over 2% as investors agitated over a possible reduction in demand

- A senior market analyst, Edward Moya, has argued that oil prices are likely to remain vulnerable as the coronavirus became a global pandemic.

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Oil prices have fallen as concerns about the global spread of the coronavirus causes anxiety among investors.

YEN.com.gh understands that oil prices fell over 2% on Monday, February 24, 2020 as the spread of the virus left investors worried about a potential fall in demand.

With new cases recorded in Iran, Italy and South Korea, Brent crude reportedly fell by $1.42, or 2.4%, to $57.08 a barrel by 0552 GMT; U.S. crude also fell by $1.26, or 2.4%, to $52.12.

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Per a reuters.com report, Edward Moya, a senior market analyst at OANDA, noted that “demand destruction for crude is likely to intensify as travel restrictions will likely increase as the coronavirus outbreak becomes a global threat and not just contained to China.”

He added that oil prices are likely to remain vulnerable as the coronavirus became a global pandemic.

Local Chinese officials revealed on Monday, February 24, 2020, that four provinces, Yunnan, Guangdong, Shanxi and Guizhou had lowered their virus emergency response measures.

China’s president, Xi Jinping earlier indicated that the world’s largest energy consumer will adjust policy to help cushion the blow to the economy from the virus outbreak.

In other news, the Bank of Ghana has introduced a platform with which commercial banks can trade in real-time.

The decision, according to the Central Bank, is in line with measures to help stabilize the cedi against its major trading currencies.

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Referred to as the Refinitiv Matching Platform, it forms part of the Bank of Ghana’s plan to provide a transparent trading system.

This, per a report by Business Insider, would create a stable pricing strategy for the local currency. According to the governor of the Bank of Ghana, Dr. Ernest Addison, the platform is the latest addition to the number measures the bank is employing to stabilize the cedi.

“The adoption of this platform is key to deepening the local FX market, and we, therefore, expect full adoption from every bank. I expect this platform to play an effective role in further transforming the interbank market into a deeper, liquid and more efficient one which would, in turn, support the central bank’s mandate of price and financial stability,” Dr Addison noted.

YEN.com.gh understands that other major stakeholders such as the Bulk Oil Distribution Companies and mining firms would soon be rolled unto the platform.

This would help them see in real-time the trading position of the cedi against the other currencies.

READ ALSO: President Akufo-Addo cautions minority against ill-judged comments about the coronavirus

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Source: Yen

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