Coronavirus has created a great deal of pandemonium in the world. This pandemic has affected negatively the health of the world’s population, businesses, and recently oil has had its fair share.

Oil revenue has dwindled beyond expectations by oil producers and experts. The coronavirus has created this slum in demand because governments of the world have embarked on lockdown to protect the spread of the disease. The lockdown means that less transportation, factory work which uses oil is down. People are not driving their cars as many times as before which means less purchase of petrol or diesel.

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Factory work or industrial work has either reduced or stopped in many countries due to lockdown. Most automobile companies like BMW, Toyota, etc have shutdown production which means that the oil they used to consume will no more be consumed. Some of the United States petrol filling stations have all shutdown because the demand is low which has forced prices down to about more than 35%.

In the world’s oil production there is more production than what is needed and there is an excess supply of crude oil and so in the international market oil prices have dwindled below expectations.

The international oil price has reduced to about 17 percent in Asian trade to $15.98 a barrel — its lowest point since mid-1999 — and then increased to $17 as markets opened in Europe.

According to an interview the Executive Director for the Institute of Energy Security (IES) granted one media house in Accra, Mr. Anamuah Sakyi said: “We are certain that within the next few days it will correct itself because the May contract coming forward will be positive and above $50 per barrel. “I don’t see much concern because of the exceptional case in the US. However, we also saw Brent crude tumble by more than 8% today. It means that if we don’t halt production or production across the globe is not curbed, then we will see more of excess supply.

“That means, the Brent mark that Ghana sells their products will also fall and that will mean that either all the oil producers in Ghana would have to shut down or they also have to be prepared to sell at a lower cost; which also means that no revenue for, not just the oil producers but for Ghana”.

 

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