Oil Prices Crash Almost 5 Percent On Demand Worries As Virus Impact Widens

Crude oil prices tumbled almost 5 percent on Monday as impact from the coronavirus widened, raising questions about demand for energy from a potential slowing in business and activity across the world

NEW YORK (UrduPoint News / Sputnik - 24th February, 2020) Crude oil prices tumbled almost 5 percent on Monday as impact from the coronavirus widened, raising questions about demand for energy from a potential slowing in business and activity across the world.

Brent, the London-traded global benchmark for crude, was down $2.81, or 4.9 percent, to $55.13 per barrel by 10:42 a.m. EST (15:42 GMT). Its previous sharpest decline in a day was 6.5 percent on September 17.

West Texas Intermediate, the New York-traded benchmark for US crude, fell $2.47, or 4.6 percent, to $50.91 per barrel. Its previous biggest loss was 4.9 percent on January 8.

Oil prices tumbled as a spike in coronavirus infections in Italy, South Korea and Iran triggered risk aversion across markets, driving investors out of energy and equities toward safe havens like gold, the Dollar and US Treasury notes.

The International Energy Agency (IEA) forecast recently that demand for oil will be 435,000 barrels less per day in the first quarter of this year versus the opening quarter of 2019.

The Paris-based agency also cut its growth projection for 2020 to 825,000 barrels per day, a reduction of nearly a third from its previous target, and the lowest growth forecast since 2011. It was the IEA's most bearish forecast for oil since crude prices went back up to $100 a barrel in 2011 after the financial crisis, before falling back to nearly $25 in recent years.