Crude prices fall as market grapples with heightened coronavirus concerns

Singapore — 0253 GMT: Crude oil futures ticked lower during midmorning trade in Asia Dec. 28 as concerns intensified about the new coronavirus strain and countries across the world reported new infections while the market awaited further news on the US fiscal relief package.

At 10:53 am Singapore time (0253 GMT), the ICE February Brent crude contract was down 17 cents/b (0.33%) from the Dec. 24 settle at $51.12/b while the NYMEX February light sweet crude contract was down 12 cents/b (0.25%) at $48.11/b. Both markers had fallen 1.86% and 2.05% in the week to Dec. 24 to settle at $51.29/b and $48.23/b, respectively.

News about the strain continued to weigh on the oil complex morning Dec. 28 after several countries, including Canada, France, Japan, Spain and Norway, reported cases of the strain -- first detected in the UK. There are now fears that this variant may have transmitted undetected to many other countries, many of whom do not conduct genomic sequencing as actively as in the UK, according to analysts.

Following the confirmation of new COVID-19 infections, Beijing entered into an emergency mode over the weekend and tightened measures to control the spread. South Korea has extended social distancing measures in a bid to suppress infection numbers, which remain near record levels.

The market awaited clarity on the status of the US stimulus package, after the US President Donald Trump tweeted Dec. 28 that there is "good news" on the stimulus front but gave no further details. Trump in the week ended Dec. 26 refused to sign a Congress-approved $900 billion package and said the amount allocated for direct payments be increased.

"With a shortened working week, investors would be looking forward to President Donald Trump signing the combined pandemic relief and funding bill to avoid the start of a partial government shutdown," said Avtar Sandu, senior commodities manager at Phillips Futures, in a Dec. 28 note.

"Most analysts believe that the President would eventually sign the bill," he added.