Oil prices have fallen for the sixth consecutive day as the number of deaths from the coronavirus outbreak in China continues to rise.
According to Reuters, Brent crude futures were down $0.51 at $58.81 a barrel. US West Texas Intermediate (WTI) futures were down $0.32 at $52.82 a barrel.
The coronavirus outbreak led to a global sell-off of riskier assets by investors on Monday.
The US and other countries have issued travel advisories as China’s coronavirus death toll passes 100. This leaves millions of Chinese people stranded during the country’s biggest holiday season.
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Reuters quoted Eurasia Group president Ian Bremmer as saying: “The near-term potential of a nationwide travel shutdown is high.”
According to Barclays, oil prices will be $2 below its forecasts of Brent at $62 a barrel over 2020. It has altered its WTI forecasts to $57 per barrel due to the potential economic issues caused the outbreak.
It said: “If air passenger traffic in China declined by half in the first quarter of 2020, it would likely lead to a 300,000 barrels per day year-on-year decline in jet-kerosene demand.
“While it remains to be seen how quickly the spread of the virus is contained, experience from the 2003 SARS outbreak suggests demand worries are likely overdone.”
Reuters reported that the OPEC has played down the problems created by the virus. Meanwhile, Saudi Arabia said that it could respond to any changes in oil demand.
The OPEC+ alliance has been curbing supply to support oil prices. It recently increased its agreed output reduction by 500,000 bpd to 1.7 million bpd until March.