Oil prices fall 3% to their lowest level this year

Oil prices fell nearly 3 per cent on Thursday, plunging for a fifth day to their lowest since January 2019 as a rise in new coronavirus cases outside China fuelled fears of a pandemic that could slow the global economy and dent demand for crude.

Brent crude was down 2.9 per cent, at $51.88 a barrel at 5.15pm UAE time. West Texas Intermediate futures fell by $1.41 cents, or 2.9 per cent, to $47.32 a barrel.

For the first time since the start of the coronavirus outbreak in China, the number of new infections outside the country exceeded new Chinese cases.

The spread of the virus to large economies including South Korea, Japan and Italy has raised concerns that growth in fuel demand will be limited. Consultants Facts Global Energy forecast oil demand would grow by 60,000 barrels per day in 2020, a level it called “practically zero”, due to the outbreak.

US President Donald Trump sought to assure Americans on Wednesday that the risk from coronavirus remained “very low”, but global equities resumed their plunge, wiping out more than $3 trillion (Dh11.01tn) in value this week alone.

“The negative price impact would intensify if the coronavirus were declared pandemic by the World Health Organisation, something that looks imminent,” said PVM Oil Associates analyst Tamas Varga.

“The mood is gloomy and the end of the tunnel is not in sight – there is no light ahead just darkness. Not even a refreshingly positive weekly US oil report was able to lend price support.”

Petrol stockpiles dropped by 2.7 million barrels in the week to February 21 to 256.4 million, the Energy Information Administration said on Wednesday, amid a decline in refinery throughput.

US crude oil stockpiles increased by 452,000 barrels to 443.3 million barrels, the EIA said, which was less than the two million barrels rise analysts had expected.

The crude market is watching for possible deeper output cuts by Opec and its allies .