The worldwide demand for oil has fallen sharply as a result of the outbreak of the new corona virus. According to analysts and traders, this decline is almost entirely due to airlines that have decided to cancel flights to and from China.
The market takes into account a drop in demand for oil in China by 250,000 barrels per day due to the virus. That country is not only the largest oil importer worldwide, it is also one of the fastest growing aviation markets in the world. Due to the outbreak and spread of the virus, strict travel restrictions apply. This affects both domestic and international travel.
The demand worldwide will be 500,000 barrels per day according to market experts. The lower demand will logically affect the price development of oil. The activities of Chinese refineries reportedly fell by 15 percent last week. It is still unclear how much the virus will ultimately have on the Chinese economy and therefore also on the global economy.