Oil drops below $57 on coronavirus impact and OPEC+ delay
LONDON: Oil fell below $57 a barrel on Tuesday, pressured by concerns over the impact on oil demand from the coronavirus outbreak in China and a lack of further action by OPEC and its allies to support the market.
Forecasters including the International Energy Agency (IEA) have cut 2020 oil demand estimates because of the virus. Though new cases in mainland China have dipped, global experts say it is too early to judge if the outbreak is being contained.
Brent crude LCOc1 was down $1.02 at $56.65 a barrel by 1100 GMT after rallying in the previous five sessions. U.S. West Texas Intermediate crude CLc1 fell 82 cents to $51.23.
“Risk aversion has returned to the markets,” said Commerzbank analyst Carsten Fritsch.
“OPEC+ has shown no sign yet of reacting to the virus-related slump in demand by making additional production cuts.”
The virus is having a wider impact on companies and financial markets. Asian shares fell and Wall Street was poised to retreat on Tuesday after Apple (AAPL.O) said it would miss quarterly revenue guidance owing to weakened demand in China.
“This has spooked market players and triggered a sharp pullback in risk assets,” said Tamas Varga, of oil broker PVM, referring to Apple’s statement. -Reuters