Coronavirus fears are causing oil prices to slide
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Oil prices have resumed their slide in recent days, signaling renewed fears of how much the novel coronavirus will eat into demand.
Why it matters: It's a barometer of how the spreading and sometimes deadly illness is curbing global economic activity.
Driving the news: The latest estimate arrived Wednesday morning when Goldman Sachs analysts cut their 2020 demand growth forecast by 600,000 barrels per day from the prior 1.2 million.
- This reflects "large demand declines in China, second derivative demand impacts in both OECD and non-OECD Asia, and some mild weather impacts in North America and Europe."
- "If the coronavirus spreads further globally, then we expect further downside risk to our estimates," they said in a note.
What's next: All eyes will be on next week's meeting of OPEC+, which is the coalition of OPEC, Russia and other allied producers.
- “OPEC+ may decide to trigger more supply cuts at next weeks meeting, but this may only have a limited effect on oil prices, as demand-side concerns are expected to continue having a major sway on the commodities complex,” FXTM analyst Han Tan tells Reuters.
The big picture: COVID-19 has killed more than 2,700 people and infected over 81,000 others.
- By Wednesday morning, South Korea had the most cases outside China, with 1,146 infections. Europe's biggest outbreak is in Italy, where 322 cases have been confirmed.
Go deeper: The latest on the coronavirus
