US oil prices fall to 17-year low as coronavirus spreads

Oil prices fell for a third session on Wednesday with U.S. crude futures tumbling to a 17-year low as the outlook for fuel demand darkened with travel and social lockdowns triggered by the coronavirus epidemic.

U.S. crude was down 84 cents, or 3.12%, at $26.11 a barrel by 0822 GMT, having earlier fallen to $25.83 a barrel, the lowest since May 2003.

Brent crude was trading down 37 cents, or 1.29%, at $28.36 a barrel by 0650 GMT, after dropping to $28.05, the lowest since early 2016.

“The oil demand collapse from the spreading coronavirus looks increasingly sharp,” Goldman Sachs said in a note forecasting a fall in the price of Brent to as low as $20 a barrel in the second quarter, a level not seen since early 2002.

The bank also expects a demand contraction of 8 million barrels per day (bpd) by late March due to the pandemic and an annual decline in 2020 of 1.1 million bpd, which it said would be the most on record.

In efforts to support economies, the world’s richest nations prepared to unleash trillions of dollars of spending to lessen the fallout from the coronavirus outbreak, as well as imposing social restrictions not seen since World War Two.

The impact on oil demand is starting to show in official statistics with Japan’s trade bureau saying on Wednesday that crude imports into the world’s third-biggest economy fell 9% from a year earlier in February.