As the new coronavirus halted travel and economic activity in China and other locations around the world, the drop in global oil demand in the first quarter was expected to be the largest recorded in history, according to IHS Markit. Compounding problems, Saudi Arabia and Russia couldn’t agree to production cuts at an OPEC meeting last week, sending prices on a downward spiral. Oil prices were hammered Monday, falling as much as 34% to $27.34 a barrel, the most in one day since the 1991 Gulf War. Oil demand is expected to be 3.9 million barrels per day lower than the same time last year. The suddenness and the scale of the decline is unprecedented, said Jim Burkhard, vice president of oil markets at IHS Markit. It’s expected to surpass the largest previous decline in 2009. Most of the demand decline was in China, but cases of the virus outside China are accelerating so the impact is expected to continue into the second quarter.
Oil demand in the tank
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