Oil Futures Cut Losses Thursday

WASHINGTON (DTN) -- Crude and product futures on the New York Mercantile Exchange and Brent on the Intercontinental Exchange eroded further on Thursday. However, futures pared steep declines following settlement, even as the World Health Organization designated the Wuhan 2019-nCov virus outbreak an international emergency amid a growing number of cases outside of China.

In market-on-close trade, NYMEX March West Texas Intermediate futures dropped $1.19 to a 3 1/2-month spot low settlement at $52.14 per barrel (bbl) after briefly breaking below $52 per bbl in intrasession trading. ICE Brent March futures shed $1.52 to a $58.29 per bbl settlement, with next-month delivery April contract widening its discount to $0.96 bbl. NYMEX February RBOB futures declined 3.71 cents to a near-five-month spot low $1.4937-per-gallon settlement and front-month ULSD futures dropped 4.55 cents to a more-than-one-year low settlement at $1.6396 gallon.

Crude futures hit intrasession lows after U.S. Centers of Disease Control announced the first U.S. case of Wuhan virus transmitted person-to-person on Thursday, stoking fears of a spreading global pandemic.

Amid growing calls for an international action, WHO declared on Thursday the coronavirus outbreak indeed was a global health emergency -- a rare designation aimed at helping the international community to contain the disease.

The declaration -- officially called a Public Health Emergency of International Concern -- gives countries authority to close their borders, cancel flights and screen people arriving at airports, as well as help to mobilize financial and political resources to contain the virus.

The declaration would give WHO authority to put travel advisories in place. However, agency Director-General Dr. Tedros Adhanom Ghebreyesus said during a news conference Thursday afternoon that there was no reason to unnecessarily interfere with international travel and trade.

As of Thursday afternoon, Wuhan 2019-nCon infected more than 8,200 people across the world and the death toll reached 175, mostly concentrated in central China.

Earlier reports indicated the Trump administration is considering a complete travel ban on China as it evaluates the best ways to stop the virus from spreading to the United States. Russia has ordered a complete border shutdown with China on Thursday after the infection was reported in its far eastern provinces.

Amid growing concerns over demand, Organization of the Petroleum Exporting Countries is reportedly considering to move its March meeting forward as the coronavirus in China spurs further declines in oil prices this week, according to Reuters.

Algerian Energy Minister Mohamed Arkab, who is also the cartel's rotating president, said late Wednesday that OPEC is likely to advance its March meeting to February "to find a way to balance markets." OPEC has been discussing deepening or extending production cuts to counter lost demand due to the virus.

Liubov George can be reached at luibov.georges@dtn.com

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