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Oil falls for third day amid growing concern over China virus

Published 01/23/2020, 10:06 AM
Updated 01/23/2020, 10:08 AM
Oil falls for third day amid growing concern over China virus
LCO
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CL
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TOKYO, Jan 23 (Reuters) - Oil prices fell to their lowest in
seven weeks on Thursday on concerns that the spread of a newly
identified respiratory virus from China may lower fuel demand at
the same time a report showed oil inventories in the United
States rose last week.
The so-called novel coronavirus has killed 17 people because
of respiratory illness since it emerged late last year in the
Chinese city of Wuhan. The potential for a pandemic has stirred
memories of the Sudden Acute Respiratory Syndrome (SARS)
epidemic in 2002-2003, which also started in China, and dented
economic growth and led to a slump in travel. Brent crude futures LCOc1 were down $1.05, or 1.7%, to
$62.16 a barrel by 0125 GMT, and earlier dropped to the lowest
since Dec. 4, after falling 2.1% the previous session.
U.S. West Texas Intermediate futures CLc1 fell 95 cents,
or 1.7%, to $55.78 a barrel after earlier falling to the lowest
since Dec. 3. The contract declined 2.7% on Wednesday.
More than 540 cases of the new virus have been confirmed and
authorities in Wuhan have shut transportation networks and are
urging residents not to leave to help prevent the contagion
spreading.
"We estimate a price shock of up to $5 (a barrel) if the
crisis develops into a SARS style epidemic based on historical
oil price movements," JPM Commodities Research said in a note.
The U.S. bank maintained its forecasts for Brent to average
$67 a barrel in the first quarter and $64.50 a barrel throughout
2020.


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