Oil prices fell on Monday, deepening losses for the sixth straight day to a 3-month low, on the mounting fears about the spread of the deadly virus, Coronavirus, in China and its negative impact on the Chinese economy, in addition to record production levels, especially in the US.
The US crude fell to $52.18 a barrel (lowest since Oct. 10) after it opened at $53.68, and hit a session-high of $53.68, and Brent crude fell to $58.52 (the lowest since Oct. 21), after it opened today at $60.64, and hit a day high of $60.64.
US crude lost 2.6% on Friday, and Brent futures lost 2.3%, posting their fifth straight daily loss, on concerns over China demand after the outbreak of the Coronavirus.
During the past week, oil prices lost around 7%, in the third weekly loss in a row, due to concerns about the Chinese demand and its impact on the market balance.
China revealed that the coronavirus has infected 2,682 cases, and its death toll rose to 81, with 461 of critical cases.
The Chinese government declared a state of emergency in the country, extended the Lunar New Year holiday for additional three days until Feb. 2, and ordered companies in Shanghai to postpone work until Feb. 9 at least.
The spread of the deadly virus in China intensified fears in global markets, as more travel restrictions are expected, affecting demand for oil in the world's second largest consumer.
Goldman Sachs estimated that global oil demand may fall by 260 thousand bpd, and consequently drop prices by about $3 per barrel, due to the Coronavirus outbreak in China.
Otherwise, Saudi Energy Minister Prince, Abdulaziz bin Salman, said that Saudi Arabia is closely monitoring developments in global oil markets from the impact of the Coronavirus on the Chinese economy, and said that he was confident the Chinese government and international community could contain the spread of the virus.
Prince Bin Salman added "markets are being primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite the virus' very limited impact on global oil demand," noting the SARS outbreak in 2003 and its weak impact on global oil demand.
Baker Hughes revealed on Friday that the US oil drilling rigs rose by 3 rigs during the past week, the second straight weekly increase.
The total count of operating shale oil rigs rose to 676, the highest count since the week ending in December 27.
The US output has increased more than 47% since mid-2016 to the all-time highest at 13 million bpd, due to high drilling activities.