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Oil futures edged higher Tuesday, steadying after falling to morethan a threemonth low to start the week on fears China’s coronavirus outbreak could dent global demand for crude.
West Texas Intermediate crude for March delivery CLH20, +0.58% on the New York Mercantile Exchange rose 30 cents, or 0.6%, to $53.44 a barrel, while April Brent crude BRNJ20, +0.43% was up 9 cents, or 0.2%, at $58.68 a barrel. Both grades ended Monday at their lowest level since October as investors sold assets perceived as risky, including most commodities and equities, amid worries over the spread of the viral outbreak.
For crude, fears the episode could slow global economic growth and dent demand served to amplify unease over the supply-and-demand balance. WTI, the U.S. benchmark, has tumbled more than 12% so far in January, while Brent is off more than 10% over the same stretch.
“Financial markets have thus far avoided the same magnitude of losses seen in outright oil prices over the last week or two, however, signaling a broader readiness to sell off oil in a market still dogged by broader demand concerns,” wrote analysts at JBC Energy, a Vienna-based consulting firm, in note. “Thus far the demand impact is likely limited to China, although recent reports suggest domestic travel may have fallen by almost 40% [year-over-year] at the beginning of the current holiday period.”
Chinese authorities on Tuesday said deaths from the viral disease rose by 25 to at least 106, while the number of confirmed cases in China rose to 4,515.
See: U.S. warns against nonessential travel to China as coronavirus death toll tops 100
China’s already weakening economy is set to take another hit with businesses across the country remaining shut for an extended public holiday and tourism grinding to a halt, as authorities struggle to contain the pneumonialike coronavirus that has spread across the nation, the South China Morning Post reported.
In other energy trading, March gasoline RBH20, +1.45% rose 1.2% to $1.5107 a gallon, while March heating oil HOH20, +0.99% was up 1% at $1.6994 a gallon.
March natural-gas futures NGH20, -0.27% were off 0.5% at $1.868 per million British thermal units.
