Oil slumps to 13-month low as coronavirus spreads beyond China

Oil prices fell on Thursday, to deepen losses for the sixth straight day and dive to a 13-month low, due to lingering fears over the coronavirus outbreak beyond China and its impact on the global demand for oil, in addition to concerns about the US oversupply.

The US crude fell to the lowest price since Jan. 4, 2019 at $47.85 a barrel, after opening at $48.48, and hit a high of $48.75, Brent crude fell to the lowest price since Jan. 2, 2019 at $52.62 a barrel, after opening at $53.36, and hit a high of $53.50.

The US crude lost 2.9% and Brent crude futures lost 3% yesterday, to post their fifth daily loss after the US warnings about the spread of the coronavirus.

The number of infected cases of the coronavirus outside China surpassed the Chinese number, for the first time since the outbreak, which reflects the rapid spread of the virus outside its ground zero.

The outbreak of the coronavirus in most parts of the world, has escalated market's fears over a global pandemic, which might damage the global economy and the global demand for oil.

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 Energy Information Administration (EIA) unveiled yesterday that US oil inventories rose by 0.5 million barrels in the week ending in February 21, which came lower than forecasts of 2.8 million barrels.

The total commercial inventories rose to 443.8 million barrels, the highest since the week ending in December 13, which is a negative sign on the domestic demand in the US, and the production remained unchanged at its record high of 13.0 million barrels per day.