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Coronavirus: Oil prices fall amid coronavirus, rise in crude stocks

Coronavirus and economy: Oil prices fell on Thursday as panic spread over the economic impact of the Wuhan virus in China. Here's for more

twitter-logoReuters | March 20, 2020 | Updated 12:55 IST
Coronavirus: Oil prices fall amid coronavirus, rise in crude stocks
Oil prices rose due to China virus outbreak

Oil prices fell on Thursday, resuming their declines after a brief pause earlier this week, as alarm spread over the economic impact of the Wuhan virus in China, while a bigger-than-expected increase in U.S. crude stocks added to the negative tone. Brent was down 62 cents, or 1%, at $59.19 a barrel by 0623 GMT, having risen 0.5% on Wednesday. U.S. crude was down 51 cents, or 1%, at $52.82 a barrel, after dropping 0.3% in the previous session.

Prices had steadied in recent days, after a rout pushed them to three-month lows as investors tried to assess damage from the virus to economic growth and demand for crude and its products. But now the rising death toll from the virus and its dispersion around the world has again turned screens red, with Asian stock markets down sharply.

"The Wuhan virus outbreak and its economic fall-out on Asia, the engine room of the world, remains the most crucial issue facing oil markets, with any rally likely to have short half-lives," said Jeffrey Halley, senior market analyst at OANDA.

Three Japan citizens evacuated from Wuhan, China, and repatriated on Wednesday have been confirmed to be infected with the coronavirus, including two without symptoms, the health ministry said on Thursday. Two people refused to be tested and Japan has 11 confirmed cases. A second flight of Japanese evacuees from Wuhan, where the outbreak started at the end of last year, landed in Japan on Thursday, with nine showing symptoms of fever or coughing, broadcaster NHK reported.

Infections in China have passed 7,700 and several countries started isolating citizens evacuated from Wuhan to help efforts to prevent the global spread of the epidemic. In China, the death toll has climbed to 170 people.The World Health Organisation's Emergency Committee is set for another meeting later on Thursday to reconsider whether the rapid spread of the virus should now be called a global emergency. Airlines around the world are suspending or reducing direct flights to China as travel warnings are issued by governments and passenger numbers drop. Bigger-than-expected gains in U.S. crude oil inventories last week also kept pressure on prices.

Crude stocks rose by more than seven times market expectations, gaining 3.5 million barrels in the week to Jan. 24, the U.S. Energy Information Administration (EIA) said on Wednesday. Gasoline stocks rose to a record high, increasing for a 12th consecutive week to 261.1 million barrels, the EIA said.

Also read: Coronavirus update: WHO classifies situation as high risk, but says not a global emergency

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