The recent rise in the cases of coronavirus infection in the United States is adversely impacting the price of crude oil. This has become a major determining factor leading to the weak global demand for gasoline in areas such as America and Western Europe. The US reported more than 83,000 cases for two days in a row on Friday and Saturday with health experts warning of a difficult winter ahead. Over 200,000 people have died from the virus in the U.S.

Experts say the pandemic has affected the markets in two ways. First, there is a slowdown in industrial activities and a decline in oil supplies as companies send home workers due to travel restrictions which have limited the use of jet fuel. This has adversely affected oil consumption. Another impact has got to do with the stock market reaction to the impact of the virus on the global economy painting a grim picture about future oil demand and moving demand from oil and energy stocks and further reducing prices.

CNBC is today reporting a drop in Asian trading stocks with Chinese, Japan, and South Korean stocks declining while International Brent crude futures fell 2.54% to 40.71% per barrel. US crude futures have also seen a drop to 38.73 dollars per barrel

There are fears the price of oil would remain at 40 dollars a barrel unless a cure is found for the coronavirus

The organization of Oil producing countries is also planning to cut oil production by some 5.7 million barrels a day as against 7.7 million bpd which was initially agreed on which could impact the market supply.

If this happens crude oil prices will be affected in the short term while economic activities are projected to weaken further as the coronavirus further threatens economic growth

Russian President Vladimir Putin had earlier pledged to help restore calmness in the market by supporting crude oil prices while OPEC also remains resolute in maintaining oil prices above the 30-35 dollar bpd in the worst-case scenario