SINGAPORE: Oil prices slipped on Monday on weaker Chinese oil demand in the wake of the coronavirus outbreak and as traders waited to see if Russia would join other producers in seeking further output cuts.
Oil has dropped more than 20 per cent from a peak in January after the spreading virus hit demand in the world’s largest oil importer and fuelled concerns of excess supplies.
Brent crude slipped to $54.23 a barrel by 0945 GMT, down 24 cents or 0.4 per cent. US West Texas Intermediate fell 25 cents or 0.5 per cent to $50.07 a barrel.
“The question everyone is desperate to find the correct answer to is how damaging the epidemic is to the global economy and therefore to oil demand and how long it will last,” said oil broker PVM’s Tamas Varga.
“No-one knows but as of today the crisis has not been contained, it is spreading and it has already claimed more lives than the SARS virus in 2003.” Beijing has orchestrated support for its companies and financial markets in the past week and investors are hoping for more stimulus to lift the world’s second-biggest economy.
Worries over supply were not alleviated on Friday when Russia said it needed more time to decide on a recommendation from a technical committee that has advised the Organisation of the Petroleum Exporting Countries and its allies to cut production by a further 600,000 barrels per day.
The group, known as Opec+, has been implementing cuts of 1.2 million bpd since January 2019.
— Reuters
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