Oil’s spectacular collapse continues despite global efforts to fight virus impact

Oil prices fell on Monday in Asia despite efforts from global central banks and governments to combat the impact caused by the coronavirus outbreak.

On Sunday, the US Federal Reserve announced a massive emergency move by cutting rates to near zero and launching a new quantitative program.

“Markets are trying to understand what’s going on, they’re trying to reach a view in high uncertainty, and that’s why you see lots and lots of volatility,” Fed Chairman Jerome Powell said in a press release following the decision. “I think there’s more risk to financial stability in an era like that.”

Meanwhile, New Zealand’s central bank slashed rates by 75 basis points on Monday. The Bank of Japan is also reportedly set to release more easing policies when they meet later this week.

The news provided little support to riskier assets however, as Asian stocks and oil all traded significantly lower today.

US Crude Oil WTI Futures were down 2.7% to $31.24 by 2:00 AM ET (06:00 GMT). International Brent Oil Futures plunged 4.2% to $32.42.

Oil markets were down by a quarter last week, which was the largest drop since 2008. A potential price war between Russia and Saudi Arabia and worsening coronavirus situation globally were cited as the catalysts for the oil selling.

“Global financial markets are being rattled by the growing severity of the coronavirus and at the same time spooked by the enormity of the stimulus measures to combat it,” said Vandana Hari, founder of Vanda Insights in a Bloomberg report. “If the pandemic continues to worsen across the globe, oil will head lower. If it worsens in the US, belt up for an apocalypse.”