By Scott DiSavino
NEW YORK (Reuters) – Oil prices slumped on Friday to their lowest in more than a year, set for their steepest weekly fall since 2008 as the global spread of the coronavirus stokes demand fears.
Investors worried about an economic slowdown weighing on oil demand as the virus spreads beyond its epicenter in China to more than 50 other countries.
The most active Brent future for May
That put both Brent and WTI on track for their biggest weekly declines since December 2008 at 14% and 17%, respectively.
Oil was not the only market to drop. Coronavirus panic also sent global stock markets tumbling, compounding their worst week since the 2008 global financial crisis with losses amounting to $5 trillion.
“Virtually all fixed assets are attempting to accurately discount GDP and demand impact from the coronavirus that still appears to be spreading rather than contracting,” Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois, said in a report.
Mainland China reported 327 new cases, the lowest since Jan. 23, taking its tally to more than 78,800 cases and almost 2,800 deaths. But as the outbreak eases in China it is surging elsewhere.
The number of affected countries and territories outside China stood at 55, with more than 4,200 cases and about 70 deaths.
Benchmark Brent crude’s slump this week is likely to focus minds when the Organization of the Petroleum Exporting Countries and allies including Russia, collectively known as OPEC+, meet next week to discuss output.
Several key OPEC members are leaning towards a bigger than previously expected oil output cut, four sources with knowledge of the talks said.
Saudi Arabia, the biggest producer in OPEC, and some other members are considering a cut of 1 million barrels per day (bpd) for the second quarter of 2020, up from an initially proposed cut of 600,000 bpd, the sources said.
OPEC+ is due to meet in Vienna over March 5-6.
Saudi Arabia, which said it would continue to engage with Russia on oil policy, is reducing crude supplies to China in March by at least 500,000 bpd owing to slower refinery demand.
(Additional reporting by Shadia Nasralla in London and Koustav Samanta in Singapore; Editing by David Goodman, Kirsten Donovan and David Gregorio)