Major oil futures prices went back to the dungeon on Thursday as spread of the coronavirus continue to impact negatively on the economy with businesses and companies counting losses.
As at Thursday night, the Brent crude was trading down at 76 cents or 1.19 percent to trade at $58.18 per barrel, while the US West Texas Intermediate (WTI) crude shed 41 cents or 0.77 percent to settle at $52.90 per barrel.
As a result of the spread, countries have started isolating hundreds of citizens evacuated from the Chinese city of Wuhan on Thursday to stop the spread of the epidemic that has killed 170 people as worry about the impact on the world’s second-biggest economy affects markets.
Reports show that multinationals are now closing operations in China and airline services around the world like the British Airways are suspending or reducing direct flights to China as travel warnings are issued by governments and passenger numbers drop.
The virus has spread from China to other countries which include: the United States; France; Japan; South Korea; Taiwan; Singapore; Thailand; Australia; Nepal; Vietnam; Hong Kong; Macau; Malaysia; Canada; Cambodia.
Others are Sri Lanka; Germany; UAE; India; Philippines; and Finland. This has led the World Health Organisation (WHO) Emergency Committee on Thursday to consider the rapid spread of the virus as a global emergency.
With the oil market facing low demand as a result of this, the Organisation of the Petroleum Exporting (OPEC) has disclosed that it is considering holding an emergency meeting in February as prices dip on concerns that the coronavirus outbreak will hit demand.
According to the Algerian Energy Minister on Thursday, Mr Mohamed Arkab, the producer group’s meeting scheduled for March is likely to be moved to February, adding that a decision may be taken in the coming days.
According to reports, the Algerian minister currently holds the rotating post of OPEC President; giving him the authority to convene emergency meetings in consultation with the Secretary-General and other members.
Also, the market was pressured by larger than expected build in US crude oil inventories till January 24 as it rose by more than analysts’ expectations, gaining 3.5 million barrels in the week according to data by the Energy Information Administration (EIA) on Wednesday.
