NEW YORK: Oil prices fell 2 per cent on Thursday to the lowest in three months on concerns over the potential economic impact of the coronavirus that continues to spread worldwide, while the market also considered the possibility of an early OPEC meeting.
Brent crude LCOc1 was down $1.20, or 2pc, to $58.61 a barrel by 10:56 am EST (1556 GMT). Earlier in the session it dropped to $58.17 a barrel, lowest since Oct. 15.
US crude CLc1 fell $1.21, or 2.3pc, to $52.12 a barrel, after earlier falling to $51.92 a barrel, weakest since Oct. 10.
Infection from China’s coronavirus spread to more than 8,100 people globally on Thursday, surpassing the total from the 2002-2003 SARS epidemic in a health crisis forecast to deal a heavy blow to the world’s second-largest economy.
Countries have started isolating hundreds of citizens evacuated from the Chinese city of Wuhan on Thursday to stop the spread of an epidemic that has killed 170 people.
Prices have steadied in recent days at three-month lows as investors tried to assess what economic damage the virus might inflict and its impact on demand for crude oil and its products.
“The market wants to look beyond this but it needs to get a real sense as to whether they can get the coronavirus contained,” Phil Flynn, an analyst at Price Futures Group in Chicago, said in a note.
The rising death toll from the virus and its spread have sent stocks around the world tumbling. The virus has left policymakers, still grappling with the impact of the Sino-U.S. trade war, fretting over the widening fallout.
On Thursday, Bank of Japan Deputy Governor Masayoshi Amamiya said China’s huge presence in the world economy must be taken into account in gauging the impact the outbreak could have on global growth.
The World Health Organization (WHO), which has so far held off declaring the virus a global emergency, began another meeting in Geneva to reconsider. Such a declaration would trigger tighter containment and information-sharing guidelines, but may disappoint Beijing, which had expressed confidence in defeating it.
Major multinationals are closing operations in China and airlines around the world are suspending or reducing direct flights to the country.
“The only thing that can change the current trend is an emergency OPEC meeting,” said Olivier Jakob of consultancy Petromatrix.
Saudi Arabia has opened a discussion about moving the upcoming OPEC+ policy meeting to early February from March, four OPEC+ sources said, after the recent slide in oil prices.
No final decision over the new date of the meeting has been made, and not all OPEC members are on board yet, with Iran a possible contender to oppose the move, the OPEC+ sources said.