Virus Anxiety Has Oil Poised for Longest Losing Streak Since May - Bloomberg:
Oil is heading for the longest run of weekly losses since May on fears China’s coronavirus outbreak may dent demand amid plentiful global supplies, even as U.S. crude inventories unexpectedly declined.
Futures in New York are down 4.6% this week as officials widened their travel ban beyond the epicenter of the outbreak. S&P Global Ratings warned that the virus could hit Chinese consumption following a prediction from Goldman Sachs Group Inc. earlier in the week that oil demand may drop. Broader market sentiment was mixed, with mainland China shut for Lunar New Year holidays.
The fast-spreading virus is the latest challenge for a market that’s been buffeted this year by geopolitical turmoil in the Middle East and North Africa, as well as the phase-one trade deal between Beijing and Washington. While the International Energy Agency says the world is “awash with oil,” a surprise 405,000-barrel decrease in U.S. crude stockpiles offered some relief.
“The coronavirus has clearly taken many of the more fundamental issues off the market and is clearly impacting sentiment,” said Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “Issues that could negatively impact demand seem to have a greater sort of sensitivity.”
Oil is heading for the longest run of weekly losses since May on fears China’s coronavirus outbreak may dent demand amid plentiful global supplies, even as U.S. crude inventories unexpectedly declined.
Futures in New York are down 4.6% this week as officials widened their travel ban beyond the epicenter of the outbreak. S&P Global Ratings warned that the virus could hit Chinese consumption following a prediction from Goldman Sachs Group Inc. earlier in the week that oil demand may drop. Broader market sentiment was mixed, with mainland China shut for Lunar New Year holidays.
The fast-spreading virus is the latest challenge for a market that’s been buffeted this year by geopolitical turmoil in the Middle East and North Africa, as well as the phase-one trade deal between Beijing and Washington. While the International Energy Agency says the world is “awash with oil,” a surprise 405,000-barrel decrease in U.S. crude stockpiles offered some relief.
“The coronavirus has clearly taken many of the more fundamental issues off the market and is clearly impacting sentiment,” said Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group Ltd. in Sydney. “Issues that could negatively impact demand seem to have a greater sort of sensitivity.”
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