Oil steadies, but concern over spreading China virus weighs
Oil prices were steady on Friday, but on track for a fall of up to 5% for the week on growing concern that fuel demand will weaken as the spread of a respiratory virus from China that has killed 25 so far dents travel and darkens the economic outlook.
Brent crude futures LCOc1 were 4 cents lower to $62 a barrel by 0225 GMT, its lowest since Dec. 4, after falling 1.9% the previous session. For the week, Brent is down 4%.
U.S. West Texas Intermediate futures CLc1 were down by 1 cent to $55.58 a barrel, its lowest since Nov. 29. The contract fell 2% on Thursday and is 5% lower for the week.
The new coronavirus has infected more than 800 so far in China, with 25 dead as of Thursday, according to China’s National Health Commission. The World Health Organisation has declared the situation an emergency, but stopped short of declaring the epidemic of international concern.
Most of the cases are in the central Chinese city of Wuhan, where the virus is believed to have originated late last year, though cases have now been found in at least seven other countries.
In a note on a Friday, ANZ Bank warned that further spread could crimp energy demand from the transportation sector.
On the supply side, U.S. crude oil and distillate inventories fell last week while gasoline stockpiles grew for an 11th consecutive week to an all-time high, the Energy Information Administration said on Thursday.
Crude inventories fell 405,000 barrels in the week to Jan. 17, government data showed, less than analysts’ expectations in a Reuters poll for a 1 million barrel drop.