Coronavirus Sends Panic Through Oil Markets

Oil continued to slide on Monday, with Brent dropping well below $60 per barrel, as panic around the coronavirus continues to mushroom. close [x] Remaining Time -0:17 The number of casualties in China continues to climb, as do cases of the virus elsewhere in the world. The Chinese government has tried to quarantine Wuhan and other cities, affecting tens of millions of people. Multinational businesses in China are also implementing lockdown procedures. Brent has cratered by around $7 per barrel in a week, a steep drop that is “100% down to the coronavirus,” Edward Marshall, a commodities trader at Global Risk Management, told the Wall Street Journal. “I think we’re close to peak hysteria, so yes the move is justified. We’re in full panic mode.” The Economist Intelligence Unit said that the coronavirus could reduce China’s GDP growth rate this year by 0.5 to 1 percentage point. China’s GDP was already expected to slow to a three-decade low below 6 percent this year. S&P Global Ratings said that the effect of the virus could balloon to a 1.2 percentage point reduction in GDP. “A supply glut of fuel in China would filter through to the rest of the world through exports and on that basis the market is reacting in this defensive manner,” Ole Hansen, head of commodity strategy at Saxo Bank A/S, said in a statement. “The Saudis can try to stem the sell-off but while its being driven by the need to mitigate losses that will be difficult to control.”...MORE