Oil slumps further as China virus spreads

TOKYO: Crude prices fell more than 2 per cent to multi-month lows on Monday as the rising number of cases of the new coronavirus in China and city lockdowns there deepened concerns over oil demand.
Brent crude fell by $1.28 a barrel, or 2.1 per cent, to $59.41 by 07:44 GMT, having earlier dropped to $58.68, its lowest since late October. US crude was down by $1.24, or 2.3 per cent, to $52.95, having earlier eased to $52.15, the lowest since early October.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman al-Saud (pictured), seeking to calm the market, said on Monday he was watching developments in China and said he felt confident the new virus would be contained.
Markets are being “primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite (the virus’s) very limited impact on global oil demand,” he said.
With the coronavirus’s ability to spread getting stronger most financial markets are being hit, although many are closed in Asia due to Lunar New Year holidays.
“Such extreme pessimism occurred back in 2003 during the SARS outbreak though it did not cause a significant reduction in oil demand,” Prince Abdulaziz said.
He also said he was confident the kingdom and other members of the Organization of the Petroleum Exporting Countries (Opec), along with producers in a group known as Opec+, had the capability to respond and steady the oil market if needed. — Reuters