Brent crude lost nearly 2% amid persistent worries about slowing global oil demand and economic growth caused by the coronavirus outbreak.
The Organisation of the Petroleum Exporting Countries (OPEC) agreed to cut production by 1.5 million barrels per day to equalise the decline in demand caused by the outbreak.
On the supply side, Saudi Arabia and other producers struggled to gain support from Russia to back them, even though oil prices have plunged more than 20% since the beginning of the year.
The oil price is currently at $47.69 a barrel.
Meanwhile, motorists locally receive relief after a drop in petrol prices this week.
In the video below, Director of Fuel Pricing Mechanism from the Department of Energy, Robert Maake gives reasons for the price drop…
Coronavirus
The main reason for the lower oil prices is due to lower demand triggered by the spread of the coronavirus.
Oil prices have, in the last three months, slumped by 19%. The spread of the coronavirus has added to investor and traveller concerns pushing the demand of crude oil further down.
Economists say farmers are increasingly using petrol and diesel for back-up generators in light of the current power supply challenges.
And given that 70% of South Africa’s food is transported by road, the decrease in petrol and diesel price is likely to have a positive impact on food inflation.
