Oil prices fall 2% on demand concerns as coronavirus spreads outside China
24 February, 2020
Oil prices tumbled a lot more than 2 % on Monday (Feb 24) as investors concerned about a hit to demand from the coronavirus outbreak, which is spreading rapidly outside China.
Brent crude fell by US$1.50 or 2.5 % to US$57.00 a barrel by 11.32pm GMT. US crude futures fell by US$1.26 or 2.3 per cent to US$52.12.
Concerns about the coronavirus grew on Sunday after sharp rises in infections in South Korea, Italy and Iran.
South Korea's government put the united states on high alert following the number of infections surged to over 600 with six deaths, while in Italy, officials said a third person infected with the flu-like virus had died, as the amount of cases jumped to above 150 from just three before Friday.
"We ought to not underestimate the financial disruption as a super spreader could trigger an enormous drop-in business activity around the world of proportions the world hasn't dealt with before," said Stephen Innes, chief market strategist at AxiCorp.
China, the world's most significant energy consumer, will adapt policy to greatly help cushion the blow to the economy from the coronavirus outbreak that authorities remain trying to regulate, President Xi Jinping said on Sunday.
Meanwhile, Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman referred to as "nonsense" a media report that Riyadh is considering a break from the OPEC+ alliance with Russia.
His comments followed a Wall Street Journal report having said that Saudi Arabia was considering leaving the OPEC+ alliance as China's coronavirus outbreak contributes to a drop in global oil demand.
In america, the oil rig count, an indicator of future production, rose for a third straight week. Drillers added one oil rig the other day, bringing the full total count to 679, the highest because the week of Dec 20, energy services firm Baker Hughes Co said.
Source: www.channelnewsasia.com