* Oil benchmarks on track for fourth weekly loss
* Saudi Arabia opens talks on possible Feb OPEC+ meeting
* Virus could cut China's oil demand by 250,000 bpd in
Q1-analysts
(Updates to settlement)
By Devika Krishna Kumar
NEW YORK, Jan 31 (Reuters) - Oil prices fell on Friday and
were on track for a fourth straight weekly loss on mounting
worries about economic damage from the coronavirus that has
spread from China to around 20 countries, killing more than 200
people. Prices briefly found support after Russian Energy Minister
Alexander Novak said Russia was ready to bring forward a meeting
of OPEC and its allies to February from March to address a
possible hit to global oil demand from the virus. Novak said he was in discussions with OPEC leader Saudi
Arabia and that the oil-producing nations would need several
more days to assess the impact and decide on the date of the
meeting.
"The cartel stands ready to act again if necessary but may
accept the short-term pain for now on the expectation that the
economic consequences won't be as bad as people fear and (the)
price will bounce back to more acceptable levels on its own,"
said Craig Erlam, senior market analyst at OANDA.
Brent crude LCOc1 fell 13 cents to settle at $58.16 a
barrel and was down about 4% on the week.
U.S. West Texas Intermediate (WTI) CLc1 fell 58 cents to
end the session at $51.56 a barrel, down 4.8% on the week.
During the session, prices sank to as low as $50.97 a barrel,
the lowest since early August.
Both benchmarks had risen more than $1 a barrel early in the
session.
Global equity markets were poised for their first monthly
loss since August and Wall Street's main averages tumbled more
than 1% on Friday, as mixed corporate earnings added to worries
over the impact of the coronavirus.
Disruptions in supply chains and travel curbs prompted
economists to temper growth expectations for China, the world's
second-largest economy.
Goldman Sachs said the outbreak was likely to shave 0.4
percentage point from China's economic growth in 2020 and could
also drag the U.S. economy lower. The outbreak could cut China's oil demand by more than
250,000 barrels per day (bpd) in the first quarter, analysts
said.
"It seems almost certain that the coronavirus will curb
Chinese economic growth and commodities demand this quarter,"
Capital Economics analysts said in a note.
"Should the coronavirus have a comparable effect as SARS, it
could reduce China's oil demand by roughly 400,000 barrels per
day."
Many companies in China planned to return to work on Friday
after a week-long celebration of the Lunar New Year holiday, but
authorities ordered businesses in many areas to stay shut longer
to contain the disease. Growth in China's factory activity faltered in January. The
Purchasing Managers' Index (PMI) fell to 50.0 from 50.2 in
December, China's National Bureau of Statistics (NBS) said. The
50-point mark separates growth from contraction. A Reuters poll on Friday indicated oil prices should remain
supported near current levels this year as political risks and
OPEC-led output curbs offset growing supply.
The poll of 50 economists and analysts was conducted mainly
before the coronavirus outbreak.
OPEC oil output plunged in January to a multi-year low as
top exporter Saudi Arabia and other Gulf members overdelivered
on a new production-limiting accord and Libyan supply dropped
due to a blockade of ports and oilfields, a Reuters survey
found. Still, global supplies remain abundant. U.S. crude
production climbed 203,000 bpd to a record 12.9 million bpd in
November, the U.S. Energy Information Administration said in a
monthly report. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Average 2020 Brent and WTI forecasts https://tmsnrt.rs/38W063I
China oil demand year-on-year change https://tmsnrt.rs/2GIeujK
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