Europes biggest oil company warns of tough and uncertain market as coronavirus fears intensify

  • Financial markets have been spooked by the spread of a deadly pneumonia-like virus, with energy market participants trying to assess the potential economic fallout.
  • Brent has now fallen almost 15% since climbing to an early January peak, with WTI more than 17% lower over the same period.
  • “It is a very concerning development, a lot of people will be anxious and of course we are monitoring very closely what is happening,” Ben van Beurden, CEO of Royal Dutch Shell, told CNBC on Thursday.

The chief executive of Royal Dutch Shell is preparing for a tough and uncertain energy market, amid heightened fears China’s fast-spreading coronavirus could suppress oil demand growth.

It comes amid speculation that OPEC and allied non-OPEC producers could soon step in to extend production cuts in order to support falling oil prices.

Financial markets have been spooked by the spread of a deadly pneumonia-like virus, with energy market participants trying to assess the potential economic fallout.

International benchmark Brent crude traded at $58.40 a barrel Thursday morning, down nearly 2.4%, while U.S. West Texas Intermediate (WTI) stood at $52.13, around 2.2% lower.

Oil prices had steadied in recent sessions, after a rout pushed both crude benchmarks to their lowest level since October on Monday.

Brent has now fallen almost 15% since climbing to an early January peak, with WTI more than 17% lower over the same period.

“The coronavirus, I’m sure, will keep a lot of people on edge — and rightly so,” Ben van Beurden, CEO of Royal Dutch Shell, told CNBC’s “Squawk Box Europe” on Thursday.

“It is a very concerning development, a lot of people will be anxious and of course we are monitoring very closely what is happening,” he added.

“I am absolutely convinced — and that is what we are seeing at the moment — that it will not help sentiment,” he warned.

“At this point in time, sentiment in oil markets is not so much sentiment about supply, it is all sentiment in demand.”

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