Crude Oil Stocks Draw But The Chinese Coronavirus Affected Crude Prices

Oil Jumps After Unrest Hits Key OPEC Producers Iraq and Libya

Oil Jumps After Unrest Hits Key OPEC Producers Iraq and Libya

The concern is that the Chinese economy will be harmed and reduce global demand for crude oil.

Oil prices fell more than 2 per cent on Wednesday as a market surplus forecast by the International Energy Agency (IEA) and demand worries amid the outbreak of a virus in China outweighed concern over disruptions to Libya's crude output.

Crude stocks at the Cushing, Oklahoma, delivery hub for the benchmark USA crude futures, fell 961,000 barrels to 34.9 million barrels, their lowest since November 2018, the EIA said.

Oil prices have been marginally supported after Libya's National Oil Corp.

"We estimate a price shock of up to $5 (a barrel) if the crisis develops into a SARS style epidemic based on historical oil price movements", JPM Commodities Research said in a note.

The upcoming estimate, which will be released later on Thursday, stands at a negligible -0.1 million, but an unexpected reading could affect US crude prices.

Brent crude was down $1.39, or 2.2%, at $63.20 per barrel.

Meanwhile, Brazil's energy minister, Bento Albuquerque, said the country will start talks about joining the Organization of the Petroleum Exporting Countries during a visit to Saudi Arabia in July.

Distillate stockpiles, which include diesel and heating oil, fell by 1.2 million barrels in the week to 146 million barrels, versus expectations for a 1 million-barrel rise, the data showed.

In addition, the new fear on the market, the outbreak of a coronavirus in China, could cut oil demand and push oil prices down by almost $3 a barrel, Goldman Sachs said earlier this week. Crude oil prices increased during this period despite global liquid fuels inventories growing by 130,000 barrels per day (b/d).

Official US government data is due at 11 a.m. ET (1600 GMT) on Thursday, delayed a day in observance of Monday's Martin Luther King Jr.

U.S. crude oil production remained level during the week ending January 17, U.S. Energy Information Administration (EIA) said Thursday.

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