Both crude prices and US stock furtures plunged as fears of a global oil-price war combined with coronavirus fears rattle traders worldwide. Oil prices plunged after Saudi Arabia announced massive discounts on Saturday to its official selling prices for April.

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The move came after the recommended additional production cuts was rejected by Russia.

Reacting to the news, David Lennox of Fat Prophets told CNBC-TV18, “The reaction that we saw from what happened with events over the weekend, it certainly caught the markets by surprise. We have seen somewhat of a jekyll and hyde between Organization of the Petroleum Exporting Countries (OPEC) and Russia after some 24 months of cohesive cooperation. Suddenly that has fallen apart and caught the market by surprise. Therefore, we saw a significant fall in both the brent and West Texas Intermediate (WTI) prices across the course of the weekend.

When asked if the oil demand could fall further because of the coronavirus outbreak, he replied, “There is no doubt about it, demand across Q1 of 2020 will be lower. This has caused traders to relook at their forecast for 2020."

"At this stage, we have kept our forecast the same, we think that it will come in at around about 100 million barrels. We are watching very closely as the coronavirus events starts to drag to June quarter and at that point of time, we may look at lowering our forecast.”

“We expect to see 3 to 4 million barrels of demand coming out of the market over the course of the year,” he added.

According to him the oil prices could have seen a bottom at around USD 34 per barrel because the fall was a real surprise.

“If energy is falling and one of the major producers say that they are going to push the prices lower then you don’t want to be standing in the set up for the time being, you probably want to be on a hold and see where the prices settle,” he further mentioned.