Oil prices likely to ‘stay down’ for months: Energy analysts fear impact of fast-spreading coronavirus

Oil prices slumped to multi-month lows on Monday, with energy market participants increasingly concerned about demand growth as the coronavirus spreads globally. International benchmark Brent crude traded at $58.99 a barrel Monday afternoon, down nearly 2.8%, while U.S. West Texas Intermediate (WTI) stood at $52.70, tumbling over 2.7%.

Both crude benchmarks have slipped to lows not seen since early October, as oil traders closely monitor the outbreak of a deadly pneumonia-like virus. On Sunday, Chinese officials confirmed there had been more than 2,700 confirmed cases of coronavirus, including 461 people in a critical condition as the death toll rose to 80.

The virus, which started in the Chinese city of Wuhan, has spread to other major cities such as Beijing, Shanghai, Macao and Hong Kong. China has warned the ability of coronavirus to spread is getting stronger, spooking financial markets and prompting a sharp fall in oil prices. In an attempt to soothe energy participants’ fears, Abdulaziz said, according to a Reuters report, that markets are “primarily driven by psychological factors and extremely negative market expectations adopted by some market participants despite (the virus’) very limited impact on global oil demand.”

Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman said in a statement on Sunday that he was confident the outbreak would be contained. In an attempt to soothe energy participants’ fears, Abdulaziz said, according to a Reuters report, that markets are “primarily driven by psychological factors and extremely negative market expectations adopted by some market participants despite (the virus’) very limited impact on global oil demand.”