By Barani Krishnan
Investing.com - Oil prices had their worst monthly loss in more than a year on Friday as top buyer China remained virtually crippled by the coronavirus crisis. Attempts by OPEC and its allies to expedite a meeting to prop the market also barely helped.
Brent, the London-traded global benchmark for crude oil, settled down 71 cents, or 1.2%, at $56.52. Brent struck a four-month low of $56.16 in intraday trade.
New York-traded West Texas Intermediate, the benchmark for U.S. crude, settled down 58 cents, or 1.1%, at $51.56 per barrel. WTI hit a near-six-month low of $51.11 earlier.
With January coming to a close Friday, Brent posted a monthly loss of just over 14%, its biggest slide since November 2018, when it lost 22%. WTI fell nearly 16%, its worst since May.
Friday’s losses came despite Russia’s news agency Ifax reporting that Energy Minister Alexander Novak was agreeable to the plan by Saudi Arabia and others in the OPEC+ group to bring forward to next month their scheduled meeting in March, in an attempt to put a floor under the market.
Bloomberg, in a separate report Thursday, said Moscow appeared resistant to expediting a meeting as it would mean deeper output cuts for those involved — something independent oil producers in Russia were against. The Ifax report, however, suggested that the only problem for Moscow was agreeing with the rest of OPEC+ on a new date for the meeting.
Data showed China’s factory activity faltered in January, adding to fears about the fallout to the economy from the month-long coronavirus epidemic, which showed no signs yet of coming under control after having killed more than 200 people and infected nearly 10,000.
Goldman Sachs (NYSE:GS) revised down China's 2020 GDP growth expectations to 5.5% from 5.9%.
Global markets briefly calmed late on Thursday after the World Health Organization gave China top marks for its efforts in battling the epidemic and containing it largely within its borders, despite its spread to nearly two dozen other countries. Yet, when trading resumed Friday, sentiment crashed again.
“Fear (is) creeping back in because despite that (WHO) proclamation that it should not interfere with travel and trade, the fact is, it already has,” Phil Flynn, senior energy analyst at the Price Futures Group in Chicago, said. “The coronavirus has spread from China to around 20 countries, killing more than 200 people.”