Oil prices slumped for a sixth day in a row on Friday to their lowest in more than a year, causing futures to drop by the most in a week since 2016, as the spread of coronavirus stoked fears that a slowing global economy would hit energy demand.
The coronavirus spread further, with cases reported for the first time in six countries across three continents, battering markets and leading the World Health Organisation to raise its impact risk alert to “very high.”
The most active Brent future for May delivery fell $US2.06, or 4.0 per cent, to settle at $US49.67 a barrel, its lowest since July 2017.
Brent futures for April delivery, meanwhile, lost $US1.66, or 3.2 per cent, to settle at $US50.52 a barrel, while US West Texas Intermediate crude fell $US2.33, or 5.0 per cent, to settle at $US44.76. That is the lowest closes for both Brent and WTI since December 2018.
For the week, Brent lost almost 14 per cent, its biggest weekly percentage decline since January 2016, while WTI fell over 16 per cent in its biggest weekly percentage drop since December 2008.
Coronavirus panic also sent global stock markets and industrial and precious metals prices tumbling, with losses amounting to $US5 trillion.
Benchmark Brent crude’s slump should focus minds on next week’s meeting between the Organization of the Petroleum Exporting Countries and allies including Russia, collectively known as OPEC+.
Several key OPEC members are leaning towards a bigger than previously expected oil output cut, four sources with knowledge of the talks said.
OPEC+ is due to meet in Vienna over March 5-6.