TOKYO- Oil recovered from underperformance as investors sought safety in bargains after crude prices lost 4% in previous trading session. However, lurking fears that larger coronavirus contagion could inflict more damage to economy restricts oil activity.
Brent crude added 29 cents, equivalent to 0.5%, and last stood at $56.59 per barrel by 0212 GMT. The increase followed after the crude declined 3.8%. on Monday, the worst drop since Feb.3. U.S West Texas Intermediate futures clocked in 22 cents, equivalent to 0.4%, and last quoted at $51.65, recovering from its 3.7% loss in the previous session.
Concerns about demand dragged crude products and other industrial goods on Monday while U.S. and European equities met a sharp decline since mid-part of 2016.
“Fears that the rapidly-spreading coronavirus outside of China could lead to a bigger-than-anticipated impact on global economy and oil demand will likely keep weighing on market sentiment,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
World Health Organization said that the virus contagion can still be contained and is still premature to even declare it a global crisis. However, the agency warned that it has the probability to reach that state.