Oil extends losses as coronavirus outbreak accelerates outside China

Oil futures settled lower for a fourth straight session Wednesday as demand destruction concerns continued to dominate amid the further spread of the COVID-19 coronavirus.

ICE April Brent settled $1.52 lower at $53.43/b, and NYMEX April WTI was down $1.17 at $48.73/b at market close.

The US Centers for Disease Control said Wednesday that for the first time since the outbreak began, the number of new cases outside of China has exceeded those inside China, according to media reports.

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The number of confirmed cases worldwide increased to 81,325 across 46 counties as of Wednesday afternoon, according to University of Virginia data. At least 2,769 deaths have been attributed to the outbreak.

"This is a make-or-break moment for the oil industry, and in order for higher oil prices to occur, central banks need to deliver a wrath of stimulus, OPEC + must deliver deeper production cuts next week, the global spread of the virus needs to ease," OANDA senior market analyst Edward Moya said in a note.

US President Donald Trump is slated to address the outbreak live from the White House later Wednesday.

Front-month Brent and WTI settled nearly 10% below their most recent highs on February 20, and were last lower in early January 2019.

"While the pace of reported new COVID-19 outbreaks in China has begun to slow, it remains to be seen what the global impact is, as more cases emerge and travel restrictions and quarantine efforts are becoming more widespread in regions outside of China," Goldman Sachs analysts said in a note Thursday.

The investment bank has halved its 2020 oil demand growth forecast to 600,000 b/d.

S&P Global Platts Analytics has slashed its forecast of 2020 demand growth to 860,000 b/d.

Year-ahead WTI futures moved to a 28 cent premium to the front-month contract, swinging the curve back into contango for the first time since February 18. Brent structure also weakened Wednesday, but the one-year spread was still in a 7 cent backwardation at market close.

Refined product futures moved sharply lower on concerns that the outbreak could impact consumer demand in the US.

NYMEX March ULSD settled down 6.91 cents at $1.4994/gal, and March RBOB was 7.75 cents lower on the day at $1.4549/gal.

Front-month RBOB price settled down more than 5% on the day and have plunged nearly 13% from February 20.

A total of 60 Covid-19 cases have been confirmed in the US as of Wednesday, but a further 83 people were in a self-quarantine outside of New York City after returning from China, according to media reports.