Oil prices fell around 1% on Friday: growing worries about fuel demand

Oil prices fell around 1% on Friday, pressured by growing worries about fuel demand as a coronavirus epidemic spread further beyond China, and as major crude producers appeared to be in no rush to cut output to buttress the market. Brent crude LCOc1 was down 64 cents, or 1.1%, at $58.67 a barrel by 0703 GMT, while U.S. crude CLc1 dropped 54 cents, or 1%, at $53.34 a barrel.

South Korea’s fourth-largest city has become the latest virus hotspot, with streets abandoned and residents staying indoors after dozens of people were infected in what authorities described as a “super-spreading event” at a church. Singapore and Japan are on the cusp of recession and the epidemic will be a major focus of talks at a meeting of G20 finance leaders on the weekend.

Russian Energy Minister Alexander Novak said on Thursday that global oil producers understood that it would no longer make sense for the Organization of the Petroleum Exporting Countries (OPEC) and its allies to meet before their gathering. The grouping, known as OPEC+, has been withholding supply from the market to support prices for several years now and many analysts expect an extension or deepening of the restrictions on production. Moscow has said it will disclose its stance in the coming days.

Adding to pressure on oil prices was the strength of the U.S. dollar as investors looked for safe havens. A stronger greenback typically makes oil more expensive as the commodity is usually priced in dollars. In the United States, crude stockpiles rose for a fourth week last week, although less than analysts had forecast. Gasoline and distillate inventories continued recent declines.

Oil falls 1% as spreading virus compounds concerns over demand hit, Reuters, Feb 21