Oil drops to 2-week lows on fears over coronavirus global outbreak

Oil prices fell in European trade today, to head for the fifth daily loss and dive to a 13-month low, due to lingering fears over the coronavirus outbreak and its impact on the global economy, in addition to a rise in US crude inventories, as the US continued to oversupply the market, marking its place as the world's largest oil producer.

US crude fell to the lowest price since Feb. 10, 2019 at $49.47 a barrel, after opening at $50.08, and hit a high of $50.41, and Brent crude fell to  the lowest price since Feb. 12 at $54.25 a barrel, after opening at $55.02, with a high of $55.42.

The US crude lost 2.4% yesterday, and Brent futures lost 2.1%, to post the fourth daily loss after the US warnings about the spread of the coronavirus.

This came after the rapid coronavirus spread beyond China, especially  in South Korea, Italy and Iran, as the virus death toll in Iran rose to 16 victims, which is the highest after China.

The US Centers for Disease Control and Prevention urged citizens to prepare for a potential coronavirus outbreak in the US, especially after infections increased in more countries.

Fatih Birol, Executive Director of the IEA, said yesterday that the agency has cut it global oil demand outlook to ten-year low, adding that further cuts are possible due to the coronavirus outbreak.

The American Petroleum Institute (API) revealed yesterday in preliminary data the US crude inventories rose by 1.3 million barrels during the week ending in Feb. 21, lower than forecasts of 2 million barrels, and reached a total of 443.9 million barrels, which is the highest level since Dec. 13.

While the US Energy Information Administration (EIA) will release today the official data on inventories and production levels in its weekly report, with forecasts for inventories to rise by 2.3 million barrels.