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UPDATE 8-Oil falls over 2% on concerns over economic toll from virus

Published 22/02/2020, 03:12 am
© Reuters.  UPDATE 8-Oil falls over 2% on concerns over economic toll from virus
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* China reports uptick in new coronavirus cases

* U.S. services, manufacturing sectors stall in February

* Russia says early OPEC+ meeting no longer makes sense Interactive graphic on coronavirus: https://tmsnrt.rs/2GVwIyw (New throughout, updates prices, market activity and comments)

By Swati Verma

BENGALURU, Feb 21 (Reuters) - Oil prices slid more than 2% on Friday as investors fretted about crude demand being pinched by the economic impact of the coronavirus outbreak, while leading producers appeared to be in no rush to curb output.

The latest signs of infections outside the Hubei province epicentre spurred a selloff across financial markets, as G20 policymakers travelled to Saudi Arabia for talks on the global economy. crude LCOc1 was down $1.32, or 2.2%, at $57.99 a barrel by 10:52 a.m. EDT (1552 GMT), on track for its biggest daily decline in nearly three weeks. U.S. crude CLc1 dropped 96 cents, or 1.8%, to $52.92.

"It's safe to say that uncertainty (surrounding coronavirus) has returned with a vengeance," said Ole Hansen, head of commodity strategy, Saxo Bank.

"We have to acknowledge that we're dealing with the biggest demand shock since the financial crisis... Until we see China getting back to work, the virus will be the main focus."

In the latest evidence of the economic hit from the virus, U.S. business activity in both the manufacturing and services sectors stalled in February. over the virus have also largely overshadowed risks to supply, including the latest blockade in Libya, said Edward Moya, senior market analyst at OANDA in New York.

The United Nations on Friday said ceasefire talks were back on track between forces fighting over Libya's capital, days after the internationally recognised government pulled out of negotiations. agreement between the fighting parties could end outages of about 1 million barrels per day of Libyan oil and increase pressure on prices.

Also on the supply front, Yemen's Houthis said they had struck facilities of Saudi oil giant Aramco (SE:2222) in the Red Sea port of Yanbu. also pointed to signs that Organization of the Petroleum Exporting Countries (OPEC) was unlikely to add to existing supply curbs.

Russian Energy Minister Alexander Novak said on Thursday that producers understood it would no longer make sense to meet before a planned gathering in March. the Saudis and Russians are struggling to agree on the appropriate response to the demand destruction the coronavirus has created," were also weighing on prices, Moya said.

"Markets are starting to doubt we'll see the full 600,000 bpd in additional (OPEC+) cuts."

Still, prices eyed their second straight week of gains, having risen to their highest since late January on Thursday, after data showed U.S. crude stocks rose less than expected last week. EIA/S

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ CHART: U.S. oil may test support at $53.16 per barrel

CHART: Brent oil may retreat to $58.21

GRAHPIc: U.S. petroleum inventories

https://tmsnrt.rs/35Hre4S GRAPHIC: From coal to cars - what big data is China tracking to get back on track

Libya's daily oil production slips to 0.12 mbpd png

https://tmsnrt.rs/2ueZ0RI Libya's daily oil production slips to 0.12 mbpd interactive

https://tmsnrt.rs/38ILqVP

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