Oil plunges more than 3.5% on fears of coronavirus global spread

Oil prices plunged more than 3.5% in European trade on Monday, to deepen losses for the third straight day, on escalating fears over the coronavirus spread outside China, with increasing infections in Italy, South Korea and Iran.

US crude lost 3.5% to $51.42 a barrel, after opening at $53.31, and Brent crude fell by 3.7% to $56.30, after opening at $58.45.

The US crude lost 0.7% on Friday, and Brent crude futures fell 1%, their second daily loss due to lingering fears over the coronavirus global outbreak.

Oil prices gained around 2% during the past week, to post the second straight weekly gain, after signs of a slowdown in coronavirus infections in China, US sanctions on Venezuela, and Libyan oil output drop.

The rapid coronavirus spread outside China escalated fears over weaker oil demand in a market that is already oversupplied, especially by the US.

South Korea today announced the highest alert state of infectious diseases, after the virus infected more than 700 cases and its death toll rose to 7 victims.

The Italian health authorities also revealed today 152 confirmed cases of coronavirus, after the virus claimed 4 victims.

Leading to Iran revealing 43 were infected and the death toll rose to 8 victims, pointing that most of cases occurred in the holy Shiite city, Qom.

The International Energy Agency (IEA) last week lowered its forecasts for global oil demand by 435,000 barrels per day during the first quarter of 2020 due to the coronavirus outbreak, in the first quarterly drop since the global financial crisis in 2009.

Baker Hughes for oil services reported on Friday that the US drilling rigs rose by one, to continue rising for the third week.

The total shale oil drilling rigs rose to 679, at the highest level since the week ending in December 27.

This increase in drilling led the US production to rise by more than 47% since mid-2016 and jump to its all-time high of 13.0 million barrels per day.