Oil and Gas Prices Fall as Coronavirus Grows

Oil and gas prices are highly determined on the current economic growth or world events. Factors such as climate change, country disputes and diseases can have a negative impact on the slump in oil and gas demand however, for the consumer it can be less strain on their wallet.

At the beginning of the year we saw the Iran leader who was strategically targeted and killed by the US which had an impact on oil and gas prices. Now we are being met with a new challenge, the disease outbreak in China known as the Coronavirus, which has meant oil and gas prices are continuing to fall dramatically. Barrels have in fact, gone down roughly $6 per barrel since 20th January 2020 which is highly significant. If the spread of the disease grows it is likely that we will continue to see prices fall.

China is one of the big players when it comes to oil and gas consumption and because they use so much of the world’s oil having a disease outbreak in the middle of China is incredibly important. Following the outbreak, oil and gas demand has decreased and is now seeing prices drop dramatically already.  

The economic impact of the Coronavirus will depend on how widespread the outbreak and how quickly it can be contained. We may see further impact to oil and gas prices if the outbreak isn’t controlled effectively.

Previous outbreaks such as SARS in 2002 can suggest that the outbreak could negatively affect the consumer over the next 2 – 3 months and be compensated for later on in the year, however, that is yet to be determined.

Prices fall when demand is decreased and generally, prices will rise as soon as demand starts to increase again. Oil and gas prices are continually fluctuating but big events like the Coronavirus and climate change can have an impact on oil and gas price futures which will probably see them being lower than previous years.