Oil falls more than 2% on spread of Wuhan virus
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[January 30, 2020] By
Julia Payne
LONDON (Reuters) - Oil prices fell on
Thursday on concerns over the potential economic impact of the
coronavirus that continues to spread worldwide, while the market also
considered the possibility of an early OPEC meeting.
Brent crude <LCOc1> was down $1.51, or 2.52%, at $58.30 a barrel by 1129
GMT, having risen 0.5% on Wednesday. U.S. crude <CLc1> was down $1.26
cents, or 2.36%, at $52.07 after dropping 0.3% in the previous session.
Countries have started isolating hundreds of citizens evacuated from the
Chinese city of Wuhan on Thursday to stop the spread of an epidemic that
has killed 170 people as worry about the impact on the world's
second-biggest economy rattled markets.
Prices have steadied in recent days at three-month lows as investors
tried to assess what economic damage the virus might inflict and to
demand for crude oil and its products.
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But now the rising death toll from the virus and its spread has again
turned screens red, with global equities falling. The MSCI world equity
index, which tracks shares in 49 countries, fell 0.5% as European shares
followed Asian indexes down.
"The market is really driven by Asia and the China virus. The only thing
that can change the current trend is an emergency OPEC meeting," said
Olivier Jakob of consultancy Petromatrix.
"The Libyan outage is not providing much of a floor. Only an additional
OPEC cut could change things."
The World Health Organisation's Emergency Committee is set for another
meeting later on Thursday to reconsider whether the rapid spread of the
virus should be considered a global emergency.
Major multinationals are closing operations in China and Airlines around
the world are suspending or reducing direct flights to China as travel
warnings are issued by governments and passenger numbers drop.
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![](../images/013020pics/busine29.jpg)
The sun sets behind an oil pump outside Saint-Fiacre, near Paris,
France September 17, 2019. REUTERS/Christian Hartmann
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Algeria’s energy minister Mohamed Arkab said on Wednesday it was very possible
that an OPEC meeting could be advanced to February instead of the scheduled
meeting in March.
ING cautioned that outages in Libya - where production has been steadily
declining amid a blockade - should not be discounted.
"While demand is a real concern, it's important not to forget about the supply
disruptions from Libya - if these losses persist, it would be enough to swing
the market into deficit this quarter," ING said in a note.
The bigger than expected build in U.S. crude oil inventories last week also kept
pressure on prices.
Crude stocks rose by more than seven times market expectations, gaining 3.5
million barrels in the week to Jan. 24, the U.S. Energy Information
Administration (EIA) said on Wednesday.
Gasoline stocks rose to a record high, increasing for a 12th consecutive week to
261.1 million barrels, the EIA said.
(GRAPHIC: U.S. petroleum inventories -
https://fingfx.thomsonreuters.com/
gfx/editorcharts/US-PETROLEUM-INVENTORIES/
0H001QXMB9NY/eikon.png)
(Reporting by Aaron Sheldrick; Editing by David Goodman and Elaine Hardcastle)
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