Oil drops more than 2% for 7th negative session in 8 as coronavirus fear escalates

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Oil prices fell more than 2% on Thursday on concerns over the potential economic impact of the coronavirus that continues to spread worldwide, while the market also considered the possibility of an early OPEC meeting.

Brent fell $1.52, or 2.5%, to settle at $58.29 per barrel, having risen 0.5% on Wednesday. U.S. West Texas Intermediate crude fell $1.19, or 2.2%, to settle at $52.14 per barrel.

Countries have started isolating hundreds of citizens evacuated from the Chinese city of Wuhan on Thursday to stop the spread of an epidemic that has killed 170 people as worry about the impact on the world's second-biggest economy rattled markets.

Prices have steadied in recent days at three-month lows as investors tried to assess what economic damage the virus might inflict and to demand for crude oil and its products.

But now the rising death toll from the virus and its spread has again turned screens red, with global equities falling. The MSCI world equity index, which tracks shares in 49 countries, fell 0.5% as European shares followed Asian indexes down.

"The market is really driven by Asia and the China virus. The only thing that can change the current trend is an emergency OPEC meeting," said Olivier Jakob of consultancy Petromatrix.

"The Libyan outage is not providing much of a floor. Only an additional OPEC cut could change things."

The World Health Organisation's Emergency Committee is set for another meeting later on Thursday to reconsider whether the rapid spread of the virus should be considered a global emergency.

Major multinationals are closing operations in China and Airlines around the world are suspending or reducing direct flights to China as travel warnings are issued by governments and passenger numbers drop.

Algeria's energy minister Mohamed Arkab said on Wednesday it was very possible that an OPEC meeting could be advanced to February instead of the scheduled meeting in March.

ING cautioned that outages in Libya - where production has been steadily declining amid a blockade - should not be discounted.

"While demand is a real concern, it's important not to forget about the supply disruptions from Libya - if these losses persist, it would be enough to swing the market into deficit this quarter," ING said in a note.

The bigger than expected build in U.S. crude oil inventories last week also kept pressure on prices.

Crude stocks rose by more than seven times market expectations, gaining 3.5 million barrels in the week to Jan. 24, the U.S. Energy Information Administration (EIA) said on Wednesday.

Gasoline stocks rose to a record high, increasing for a 12th consecutive week to 261.1 million barrels, the EIA said.