SINGAPORE (BLOOMBERG) – Oil is heading for the longest run of weekly losses since May on fears China's coronavirus outbreak may dent demand amid plentiful global supplies, even as United States crude inventories unexpectedly declined.
Futures in New York are down 5.1 per cent this week as officials widened their travel ban beyond the epicentre of the outbreak.
S&P Global Ratings warned that the virus could hit Chinese consumption following a prediction from Goldman Sachs Group earlier in the week that oil demand may drop. Broader market sentiment was mixed, with mainland China shut for Chinese New Year holidays.
That fast-spreading virus is the latest challenge for a market that's been buffeted this year by geopolitical turmoil in the Middle East and North Africa, as well as the phase one trade deal between Beijing and Washington. While the International Energy Agency says the world is "awash with oil", a surprise 405,000-barrel decrease in US crude stockpiles offered some relief.
"The coronavirus has clearly taken many of the more fundamental issues off the market and is clearly impacting sentiment," said Mr Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group in Sydney. "Issues that could negatively impact demand seem to have a greater sort of sensitivity."
West Texas Intermediate futures for March delivery lost 2 cents to US$55.57 a barrel on the New York Mercantile Exchange as of 10.09am in Singapore. It's poised for a third weekly drop after closing at the lowest level since NoRead More – Source