Oil prices unravel to lowest level in 12 months as coronavirus threat looms

Reuters

• The key US and global gauges of oil prices tumbled Thursday, after TheWall Street Journal reported WTI closed on Wednesday at its lowest price since January 2019.
• As reports around the coronavirus health crisis worsen, investors fear the economic slowdown resulting from it that will eat into oil demand.
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The downward spiral in oil continues.

WTI crude toppled 2.71% from its previous closing price to trade at $47.41 per barrel Thursday. Making that decline more dramatic: Wednesday's closing price was a 12-month low for U.S. crude, The Wall Street Journal previously reported.

Brent crude, the global benchmark, fell 2.96% Thursday to trade at $51.58 a barrel. That extended declines from Wednesday, when Brent closed down 2.8% at $53.43 a barrel.

The selloff comes as sentiment around the threat the Wuhan coronavirus poses worsens globally. The World Health Organization said Wednesday that there are now more diagnoses of the virus outside of China than in it. That's after reports earlier this week of a spike in new cases in countries from Iran to Italy. The illness has killed over 2,800 and infected more than 82,000 to date.

WTI and Brent crude have both seen their biggest five-day losses since August 2019, CNBC reported. WTI crude is down 10.4% and Brent is down 10.6% versus five trading days ago.

Oil markets are concerned a health crisis will slow economic activity enough to undermine oil demand. Coronavirus will already likely hamper growth and demand in China, the single largest importer of oil on the globe, and fears of greater fallout mount as the growth risk spreads to other economies. Adding to uncertainty, it is unclear whether OPEC will put a floor under the price fall by slashing production. Saudi Arabia and other member countries support a production cut, but Russia stood in the way of previous efforts, The Journal reported. The organization will meet late next week.

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