Oil prices fall amid concerns over demand as coronavirus spread beyond China; crude producers not to cut output

Tokyo: Oil prices fell on Friday amid concerns over fuel demand as the coronavirus epidemic spread further beyond China, while major crude producers stood pat on any early action to cut output to support the market. Brent crude was down 28 cents, or 0.5 percent, at $59.03 a barrel by 0332 GMT, while US crude was also off by 28 cents, or 0.5 percent, at $53.60 a barrel. On Friday, South Korean authorities confirmed 52 new coronavirus infections, Yonhap reported. The streets of Daegu, the country’s fourth-largest city, were deserted on Thursday after dozens of people there went down with the pathogen in what authorities described as a “super-spreading” event. In China itself, the world’s biggest importer of crude oil, new cases also rose on Friday from the day before even as Beijing presses on with efforts to contain the spread that has largely paralysed the world’s second-biggest economy.

“I think there is a lot of reason for caution right now, as the impact of coronavirus on demand is still unclear,” Stratfor oil analyst Greg Priddy said by email. “If it begins to look like the impact will be modest, that could affect Russia’s decision at the March 5-6 OPEC+ meeting on whether they are willing to endorse a further cut,” he added.

Russian Energy Minister Alexander Novak said on Thursday that global oil producers understood that it would no longer make sense for the Organization of the Petroleum Exporting Countries (OPEC) and its allies to meet before their gathering. [caption id=“attachment_3478307” align=“alignleft” width=“380”]  Representational image. Reuters[/caption] The grouping, known as OPEC+, has been withholding supply from the market to support prices for several years now and many analysts expect an extension or deepening of the restrictions on production. Moscow has said it will disclose its stance in the coming days. Adding to pressure on oil prices was the strength of the US dollar as investors looked for safe havens. A stronger greenback typically makes oil more expensive as the commodity is usually priced in dollars. Meanwhile, prices were little changed by tensions in the Middle East after Saudi Arabia said on early Friday it had intercepted and destroyed several ballistic missiles launched by Houthi militia towards Saudi cities. In the United States, crude stockpiles rose for a fourth week last week, although less than analysts had forecast. Gasoline and distillate inventories continued recent declines.