Oil prices have risen slightly after the World Health Organization (WHO) declared the coronavirus outbreak as a global emergency.
The death toll from the virus has reached 213 and the number of cases of infection has increased to 9,776, as of the end of Thursday. However, WHO recommended no travel and trade restrictions.
According to Reuters, Brent crude rose $0.27 to $58.56 a barrel. US West Texas Intermediate (WTI) futures increased by $0.23 to $52.37 a barrel.
FXTM market analyst Han Tan said: “China’s better-than-expected expansion in its January non-manufacturing PMI, along with the concerted efforts by the authorities to contain the viral outbreak, could help push back against some of the fears surrounding the epidemic’s impact on the world’s second-largest economy.”
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Saudi Arabia opened a discussion on moving an upcoming policy meeting from March to early next month. This aims to address the coronavirus impact on demand for crude stockpiles. This news also caused a slight rise in oil prices.
Energy consultancy firm Wood Mackenzie has reduced its estimate for world oil demand by 500,000 barrels per day (bpd). This covers the first quarter of this year, according to the company’s consultant Yujiao Lei.
According to Lei, China’s oil demand for the same period could also fall by more than 250,000bpd.
Lei said: “Although the Chinese government has been taking action more swiftly in a more determined manner than in 2003 (during the SARS outbreak), Chinese domestic and international transport activity is incomparably higher today and thus the impact may be larger.”
Meanwhile, major airlines are suspending air travel to China to stop the spread of the virus.