SINGAPORE: Oil prices climbed on Friday, following a drawdown in US crude stocks, but were set to fall heavily for the week amid worries that a new coronavirus in China that has killed 25 so far may spread, curbing travel, fuel demand and economic prospects.
Brent crude futures LCOc1 were up 31 cents, or 0.5 per cent, at $62.35 a barrel by 0741 GMT after falling 1.9 per cent the previous session. For the week, Brent is down about 4 per cent.
US West Texas Intermediate futures CLc1 were up 27 cents, or 0.5 per cent higher at $55.86 a barrel. The contract fell 2 per cent on Thursday and is 4.6 per cent lower for the week.
“Oil’s sell-off (for the week) continued at pace as fears continued about the effects on global demand from a virus-induced economic slowdown in Asia,” said Jeffrey Halley, senior market analyst, OANDA. “We would expect the fragility in oil prices to continue.” Offering support for prices was news that US crude oil and distillate inventories fell last week, the Energy Information Administration said on Thursday.
Though they failed to match analysts’ expectations in a Reuters poll of a 1 million barrel drop, crude inventories did decline by 405,000 barrels in the week to January 17, government data showed. “Oil prices could remain on a slippery slope as traders remain incredibly twitchy about the effects the coronavirus outbreak could have on Chinese GDP and air travel more broadly,” said AxiTrader’s Innes. — Reuter