Oil extended losses after closing at a 13-month low as more new coronavirus cases were reported outside China than within, adding to fears the world is on the brink of a pandemic that will take a hefty toll on growth.
Equity markets tumbled in Europe, despite President Donald Trump’s attempts to calm fears at a briefing on the outbreak, and crude tumbled below $48 a barrel in New York after the U.S. reported its first infection of unknown origin. New cases were diagnosed in countries from Pakistan to Brazil. Germany said it was likely at the start of an epidemic and Saudi Arabia halted religious visits. In addition to crude prices, diesel has also plummeted in recent days.
U.S. data that showed a smaller-than-forecast increase in crude stockpiles failed to arrest the slide. Oil has fallen more than 20% this year as the virus hit a market already awash with supply. Investors are assessing whether the Organization for Petroleum Exporting Countries and its allies will be able to agree on deeper output cuts at a meeting in Vienna next week.
“With more and more cases of coronavirus infections popping up around the world, markets at large are in a strong re-pricing mode,” JBC Energy analysts wrote in a report. “Weakness in equity markets continues to spill over into the oil market.”
West Texas Intermediate futures fell 2% to $47.78 a barrel on the New York Mercantile Exchange as of 10:13 a.m. in London. Brent lost 1.8% to $52.48 a barrel on the ICE Futures Europe exchange following a 2.8% drop in the previous session.
The MSCI All-Country World Index — a global stock market benchmark — was on course for the lowest close since October as investors continue to fret the spread of the coronavirus. Japan will shut all schools from March 2, while new cases were discovered in the U.K.
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