As the situation is getting worse with the outbreak spreading across South Korea, Italy, Iran, Afghanistan, and Israel, the Organisation of the Oil Exporting Countries (OPEC) has lowered its oil demand by 230,000 bpd, while the US Energy Information Administration revised down its forecast regarding global oil demand by 378,000 bpd. In a report on Coronavirus’ impact on oil prices, Tahir Abbas from Arif Habib Limited said, “We believe oil prices in the short term will be dependent on the virus updates from China including new registered cases and death tolls. As for global policy rates, decline in oil prices holds the potential to push for a wave of monetary easing which could be seen as positive for Pakistan as it could raise Eurobond and Sukuks from the international markets. Shahrukh Saleem, an investment analyst at AKD Securities, was of the view that declining oil prices would result in a decrease in the cost of captive power generation for some players in the cement sector. In addition, it is expected that the automobile sector would witness better margins considering how steel prices are declining alongside oil prices, added.

Source: Pakistan Today February 25, 2020 15:33 UTC