New coronavirus cases are surfacing in most of Europe and West Asia in clear signs of a second wave that threatens the nascent recovery and brings back the spectre of harsh lockdowns and curfews.
France has already announced a 9 pm curfew in Paris and other big cities as new virus cases surge. Britain is clamping down with new restrictions on socialising indoors.
Other countries are mulling action to bring under control the deadly virus.
The second wave doesn’t augur well for an already struggling oil market and the OPEC economies especially the Gulf nations that have seen dwindling oil wealth on account of decline in crude prices.
“The coronavirus surge is forcing Europe to reinstate pandemic restrictions and that is … crippling short-term crude demand forecasts,” Reuters quoted Edward Moya, senior market analyst at OANDA in New York, as saying.
Even as the members of the OPEC+ group are scheduled to meet on November 30 to take a call on further action, the economies of Gulf nations are trying their best to keep their crude production within the limits imposed earlier this year as a part of realignment of supply with deteriorating demand.
Many are even questioning whether the oil producers will stick to a 2 million bpd hike in January as part of tapering of production cuts.
The Gulf nations are walking a fiscal tightrope as the dampening oil demand has hit their revenues hard coupled with the impact of the virus on tourism and other non-oil sectors.
The IMF, in its latest forecast, has revised down economic growth for all Gulf countries except Saudi Arabia, whose economy is now expected to decline by 5.4% this year as against a previous estimate of 6.8% contraction. The UAE, which is the Gulf’s second largest economy, could shrink by 6.6% this year, the IMF predicted.
The global virus tally has surged to more than 38.8 million.