Crude oil futures slip amid heightened risks of flu virus

Crude oil futures were lower in mid-morning trade in Asia Wednesday, extending the overnight downtrend, as selling pressure started to kick in amid heightened fears of the recent flu virus in China, which could have an indirect impact on oil demand, analysts said.

At 11:08 am Singapore time (0308 GMT), March ICE Brent crude futures fell 19 cents/b (0.29%) from Tuesday's settle at $64.40/b, while the NYMEX March light sweet crude contract fell 23 cents/b (0.39%) at $58.15/b.

"Oil prices fell as fears of the Wuhan coronavirus spread to as far as the United States," OCBC analysts said Wednesday.

"Developments over the virus is likely to drive oil's direction in the immediate short term, especially with the risks of contagion rising ahead of Lunar New Year festivities in China," the analysts added.

Concerns over a weaker demand outlook kicked in after the first confirmed US cornoavirus case Tuesday.

US Centers for Disease control confirmed the first US case of the 2019 Novel Coronavirus (2019-nCoV) in Washington state Tuesday, Platts reported.

The virus has previously been reported in a number of Asian countries and is responsible for at least six deaths, according to media reports.

Contagious illnesses can present downside risks to air travel and in turn affect jet fuel demand, analysts said.

Despite a wave of selling pressure extending from Tuesday, concerns around recent supply disruptions at Libya and Iraq remain in focus.

"The disruption to ports and refineries in Libya dragged into its fourth day, as warring factions negotiated a peace deal," ANZ analysts said Wednesday.

"The market's faith that the US shale oil industry will mitigate any disruptions is also coming into question," they added.

As of 0308 GMT, the US Dollar Index was up 0.05% at 97.42.