Oil prices extended declines on Monday, dragged down by worries about lower demand in the world’s largest oil importer China following the coronavirus breakout.
Brent and US West Texas Intermediate crude fell for a fourth week in a row last week after airlines cancelled flights to China, CNBC reported.
Supply chains across the world’s second largest economy have also been disrupted.
Brent crude was at $55.83 a barrel, down 79 cents, or 1.4%, after losing nearly 12% in January, the steepest monthly decline since November 2018.
WTI crude fell 50 cents to $51.06 a barrel, after earlier hitting a session low of $50.42. The front-month WTI price fell 15.6% in January, the biggest monthly drop since May.
China’s factory activity stalled in January as export orders fell while analysts expect a big plunge in February’s data as the virus outbreak hit demand in the country, even as the central bank planned to inject more liquidity to shore up its economy.
“The shuttering of airports suggests that there would be at least some demand delay, if not deferred or destroyed,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
The Organization of the Petroleum Exporting Countries and its allies could bring forward their March meeting to February to discuss the impact on oil demand from the virus flare-up.
OPEC’s oil output plunged in January to the lowest since 2009 after several members led by Saudi Arabia over delivered on a new agreement to cut production and as Libya’s supply slumped.