- Brent crude was down $2.16, or 3.7%, to $56.34 barrel.
- U.S. crude futures fell by $1.93, or 3.6%, to $51.45.
- South Korea and Italy reported a rise in coronavirus cases and deaths.
Oil prices tumbled by more than 3% on Monday, asÂ the rapid spread of a coronavirus in several countries outside China leftÂ investors concerned about a hit to demand.
Global shares also extended losses as worries about the impact of the newÂ virus grew, with the number of infections jumping in Iran, Italy and SouthÂ Korea.Â
“Oil prices will remain vulnerable here as energy traders were not pricingÂ in the coronavirus becoming a pandemic,” said Edward Moya, senior market analystÂ at OANDA.
“While some parts of China are seeing improving statistics with theÂ coronavirus, financial markets will remain on edge until we start seeing theÂ situation improve in Iran, Italy, South Korea and Japan.”
South Korea’s fourth-largest city, Daegu, grew increasingly isolated as the number of infections there rose rapidly, with some airlines suspending flightsÂ to the city until March 9 and March 28, respectively. The country reported itsÂ seventh death after raising its infectious disease alert to its highest level.
Italy reported a third death from the flu-like virus and 150 infections.Â
Iran said it had confirmed 61 cases and 12 deaths, with most of theÂ infections in the Shi’ite Muslim holy city of Qom. Afghanistan, Iraq, Kuwait,Â Saudi Arabia and Turkey imposed travel and immigration curbs on the IslamicÂ Republic.
“We should not underestimate the economic disruption as a super spreaderÂ could trigger a massive drop in business activity around the globe ofÂ proportions the world has never dealt with before,” Stephen Innes, chief marketÂ strategist at AxiCorp, said in a note on Monday.
Oil prices received some support after local health officials in China saidÂ on Monday that four provinces had lowered their virus emergency responseÂ measures.Â
Chinese President Xi Jinping said on Sunday the world’s largest energyÂ consumer will adjust policy to help cushion the blow to the economy from theÂ virus outbreak.Â
Goldman Sachs said commodity prices could fall sharply before ChineseÂ stimulus efforts later this year helps the sector achieve its 12-month returnÂ forecast of about 10%.Â
“The promise of stimulus has made commodity markets act like equity markets,Â building up risks of a sharp correction,” the bank said in a note.
In the United States, the oil rig count rose for a third straight week. Drillers added one oil rig last week, bringing the total count to 679, theÂ highest since the week of Dec. 20, energy services firm Baker Hughes Co said.Â