Oil futures: Price slide continues as coronavirus slows business, cancels key industry conference

Crude futures fell Sunday evening as markets continued to price in demand destruction from the growing coronavirus, with a key industry event in Houston canceled due to rising health concerns.

NYMEX front-month crude futures fell to $43.32/b on the open, down $1.44 from Friday's settle, but later pulled off this low and around 2335 GMT the April contract down 38 cents at $44.38/b. As of Friday's settle, oil futures were down roughly 22% since January 20, when markets first began reacting to the virus.

According to Johns Hopkins University, as of Sunday afternoon there were 87,508 confirmed cases of the virus globally.

The bulk of the cases remain in China, where the virus has dramatically slowed business activity. The country's Purchasing Managers' Index fell to a record low of 35.7 in February, from 50 in January, according to a CNBC report.

However, new cases have been emerging primarily outside of China, notably in Italy and South Korea, and traders are concerned other countries will experience a similar slowdown in activity.

The coronavirus has taken a toll on energy-related business activity, as organizers Sunday canceled this year's IHS CERAWeek conference in Houston. Delegates from 80 countries were expected at the conference March 9-13.

"When the oil industry itself is halting travel and cancelling conferences, we're looking at an 'asterisk year' for demand," said Kevin Book, managing director of ClearView Energy Partners in Washington.

It was the first-ever cancellation of the conference -- which since 1983 has brought together a veritable who's who of the energy world from OPEC oil ministers to government leaders to the chief executives of major natural gas, LNG, petrochemicals and power companies.

"The World Health Organization raised the threat level on Friday, the US government canceled a summit meeting scheduled in Las Vegas, an increasing number of companies are instituting travel bans and restrictions, border health checks are becoming more restrictive and there is growing concern about large conferences with people coming from different parts of the world," IHS Markit said in a statement.

IHS Markit has also cancelled two other international conferences this month scheduled for New Orleans and Long Beach, California.

"I don't think cancellation of another conference will be a big deal. The market psychology is already bearish. It's hard to see it getting much worse," said Joe McMonigle, analyst with Hedgeye.

Bob McNally, president of Rapidan Energy Group, said the cancellation is symbolically important but minor compared with the possible cancellation of the OPEC+ meeting in Vienna, still set for Thursday and Friday.

"Were that meeting and the expected large incremental cut to be canceled, [the hit] to prices would be much greater at least until OPEC+ announced a cut in the absence of a formal meeting. But for now OPEC+ seems to be going on," he said.

S&P Global Platts Analytics has adjusted its 2020 global oil demand growth outlook down to 860,000 b/d, marking the weakest forecast since 2011.