Oil prices fell on Thursday as the death toll from the new virus in China climbed to 170 and more airlines cancelled flights to the country’s major cities, while rising US crude inventories added to the negative tone.
Brent was down 35 cents, or 0.6 per cent, at $59.46 a barrel by 7:55 am, having risen 0.5 per cent on Wednesday. US crude was down 30 cents, or 0.6 per cent, at $53.03 a barrel, after dropping 0.3 per cent in the previous session.
Still, oil prices have steadied in recent days after a rout that pushed them to three-month lows and the market is trying to assess the damage to economic growth and demand for crude and its products.
“There isn’t a compelling case crude needs to go lower until we know more about how bad the demand destruction from the coronavirus epidemic is going to be,” said Stratfor oil analyst, Greg Priddy.
A second flight of Japanese evacuees from Wuhan, China, where the outbreak started, landed in Japan on Thursday, with nine showing symptoms of fever or coughing, broadcaster NHK reported. Infections in China have passed 7,700.
The World Health Organisation’s Emergency Committee is set for another meeting later on Thursday to reconsider whether the rapid spread of the virus should now be called a global emergency.
Airlines around the world are suspending or reducing direct flights to major cities in China as travel warnings are issued by governments and passenger numbers drop.
Bigger-than-expected gains in US crude oil inventories last week also meant “oil prices were dealt the cruellest hand of them all,” said Stephen Innes, chief market strategist at AxiCorp.
Crude stocks rose by more than seven times market expectations, gaining 3.5 million barrels in the week to Jan. 24, the US Energy Information Administration (EIA) said on Wednesday.
Gasoline stocks rose to a record high, increasing for a 12th consecutive week to 261.1 million barrels, the EIA said.