Oil sinks on pressing demand problems as nCoV spreads on global scale

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SINGAPORE- Oil lost an estimated 3% earnings and fell close to hitting one-week low on Monday as the rapid coronavirus contagion outside China dampened markets sentiment and made investors wary on dwindling crude demand.

Global shares also hit lower grounds as virus concerns resurfaced brought by bloating records of virus cases in South Korea, Italy, and Iran.

Brent crude shed $1.69, equivalent to 2.9%, and last stood at $6.81 per barrel at exactly 0158 GMT. U.S. West Texas Intermediate futures declined by $1.40, equivalent to 2.6% and recently quoted at $51.98.

“It’s pretty clear in the middle of last week that the consensus overall was that it would be a temporary economic impact and that would be at least offset by the actions of central banks,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.

South Korea immediately put the state under national emergency as the number of deaths climbed up to seven. In line with this, Italy reported that the third diagnosed person had died and statistics projected an increase in diagnosis from three up to 150 cases.

Iran also released records confirming a total of 43 cases and 8 deaths. Most number of diagnoses is in Shi’te Muslim holy city of Qom. To contain the further spread of virus in neighboring countries, Saudi Arabia, Kuwait, Iraq, Turkey, and Afghanistan implemented travel ban on the Islamic Republic.

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