Oil prices sank for a sixth consecutive day early on Friday and were on track for their biggest weekly drop in more than four years as the coronavirus outbreak continues to roil global equity and oil markets.
The sell-off on the oil market has continued for more than a week as the coronavirus spread quickly outside China—to Europe, the Middle East, and as of recently—Africa.
In the countries outside China worst hit by the coronavirus, South Korea now has more than 2,000 confirmed cases of coronavirus infections, with 16 deaths as of early Friday, and Italy had 650 cases with 17 deaths. Many countries, including the Netherlands, Azerbaijan, Belarus, and Lithuania also reported their first cases on Friday, as did New Zealand and Nigeria—with Nigeria’s the first known case of the coronavirus in sub-Saharan Africa.
The World Health Organization (WHO) warned that the outbreak has “pandemic potential,” which further stoked fears on the markets that a significant slowdown in global economic activity and travel could soon follow.
All major equity markets have been suffering all week, with the S&P 500 index going through its fastest correction in history on Thursday. On Friday, stocks were also set for steep losses and for their worst weekly drop since the 2008 financial crisis.
Oil prices have been on a losing streak since last Friday, when the first reports of a sharp rise in coronavirus cases outside China emerged.
The oil price rout, the current oil demand loss, and the feared additional demand destruction in case of pandemic have reportedly prompted OPEC’s largest producer Saudi Arabia to ask members of the OPEC+ group to consider an additional collective cut of 1 million bpd when the coalition meets in Vienna next week, Financial Times reports, citing five people with knowledge of the talks.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Oil Price Forecasts Take A Turn For The Worst
- 5 Top Alt-Energy Stocks Storming Wall Street
- Russia: Coronavirus Impact On Oil Is Worse Than Expected