Oil hits 13-month low on weak Chinese demand, traders eye OPEC+ cuts

Oil prices fell to their lowest since January 2019 on Monday on weaker Chinese demand in the wake of the coronavirus outbreak and as traders waited to see if Russia would join other producers in seeking further output cuts. Oil has dropped over 25% from a peak in January after the spreading virus hit demand in China, the world’s largest oil importer, and fueled concerns of excess global supplies.

Brent futures LCOc1 fell 99 cents, or 1.8%, to $53.48 a barrel by 12:05 p.m. EST (1705 GMT), while U.S. West Texas Intermediate crude CLc1 fell 56 cents, or 1.1%, to $49.76. That keeps both Brent and WTI in oversold territory for 13 days and 14 days, respectively, their longest bearish streaks since Nov. 2018. If Brent closes at its current level, it would be its lowest settle since December 2018.

Beijing has orchestrated support for its companies and financial markets in the past week and investors are hoping for more stimulus to lift the world’s second-biggest economy. Worries over supply were not alleviated on Friday when Russia said it needed more time to decide on a recommendation from a technical committee that has advised the Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut production by a further 600,000 barrels per day (bpd).

Russia’s Energy Minister Alexander Novak said Moscow needed more time to assess the situation, adding that U.S. crude production growth would slow and global demand was still solid. Oil traders also said they were concerned the proposed reduction would not be sufficient to tighten global markets as China’s state refiners have said they would cut refining throughput by about 940,000 bpd this month.