Oil prices sunk down with 2% loss as it recorded consecutive months of lows on Monday. Such inactivity was brought heavily by the growing number of novel coronavirus cases and city lockdown that may drastically affect demand for crude.
Brent crude LCOc1 declined by $1.12 per barrel, or equivalent to 1.9% to $59.57 by 0013 GMT. Brent crude’s underperformance followed after an initial drop of $58.68, the lowest since October. US crude CLc1 inched down by $1.14, or equivalent $53.05 with its previous inactivity of $52.15, the lowest since earlier part of October.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman Al-Saud said on Monday that he was observing progresses and developments in China with confidence that the spread of the newly discovered strain of virus would soon be arrrested.
Financial markets are being “primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite its very limited impact on global oil demand,” he said.
As the novel coronavirus spreads further, financial markets are on the receiving end of its negative impact. However, most Asian markets are closed in celebration of the Chinese Lunar New Year.
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