Crude oil futures drifted lower on Friday, weighed down by growing concerns about outlook for energy demand due to the rapidly spreading coronavirus’ potential impact on the global economy.
Oil prices edged higher earlier in the session after the World Health Organization declared an international health emergency with the novel coronavirus outbreak in China, but did not recommend travel restrictions, saying there was no reason for measures that affect international travel and trade.
However, prices dropped subsequently amid uncertainty about energy demand outlook.
West Texas Intermediate Crude oil futures for March ended down $0.58, or about 1.1%, at $51.56 a barrel, the lowest settlement for a front-month contract in nearly six months.
WTI crude oil futures shed about 4.8% in the week, losing for a fourth straight week, and widening losses to 15.6% for the month.
Brent crude futures declined $0.21 to $58.08 a barrel.
According to analysts, the coronavirus might hit China’s economic growth by 0.4 to 1 percentage point this year. This could significantly hurt the U.S. economy, and in fact, global growth.
It is feared that the virus outbreak in the country might result in a substantial drop in energy demand from China.
The death toll in China from the new coronavirus rose to 213 today, as more countries announced plans to evacuate their citizens from Wuhan, ground zero of the deadly virus.
The United States issued a Level 4 warning, its highest, urging Americans to avoid travel to China as a wave of panic and infections increase.
Investors also noted reports suggesting that Saudi Arabia has opened a discussion about moving an upcoming output policy meeting to early February from March to address the sharp drop in crude oil prices recently.