Saudi Arabia and the countries of the Organization of Petroleum Exporting Countries (OPEC) are able to respond to any oil market imbalances following gloomy Chinese and global market forecasts due to the coronavirus epidemic, Saudi Energy Minister Prince Abdulaziz bin Salman Al Saud said Monday.
"The kingdom is closely following developments in the international oil market that may be affected from the coronavirus on the Chinese and global economy, including balances on the oil markets," he was quoted saying by the Saudi Press Agency.
He stressed the current impact on the oil market is currently driven by “psychological factors” and extremely negative expectations adopted by some market participants despite its very limited impact on global oil demand.
"I am confident the Chinese government and international community can contain the spread of the virus and fully eradicate it," the minister said.
He recalled the SARS outbreak in 2003 when such extreme pessimism was evident and noted that it did not result in a significant reduction in oil demand.
Nonetheless, the rise in the number of coronavirus cases in the world's two largest oil consuming countries; in China and the U.S., increases the possibility of a fall in global oil demand while creating a downward pressure on oil prices.
Crude oil prices were down at Monday's opening with rising coronavirus cases reported in both countries.
International benchmark Brent crude was trading at $58.52 per barrel at 0650 GMT for a 3.57% loss after closing Friday at $60.69 a barrel.
American benchmark West Texas Intermediate was at $52.94 a barrel at the same time for a 2.3% decline after ending Friday at $54.19 per barrel.
By Busranur Begcecanli