London — 1130 GMT: Crude oil futures plunged in European morning trading Monday on fears of coronavirus becoming a pandemic after a spike in cases outside east Asia, as well as doubts about major oil producers mounting a unified response.
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At 1130 GMT, April ICE Brent crude futures were down $2.82/b (4.8%) from Friday's settle at $56.68/b, while the NYMEX April light sweet crude contract was down $2.09/b (3.9%) at $51.29/b.
In an analysis note, Commerzbank said markets were "firmly in the grip of COVID-19", or coronavirus, following an uptick of cases in Italy and South Korea, and the effect was being compounded by Russia's refusal to endorse sharper production curbs ahead of next week's meeting of OPEC and its production partners.
Any split on the issue between Russia and Saudi Arabia "would seriously weaken OPEC's position. In this case, Saudi Arabia would have to rebalance the market more or less on its own. Furthermore, OPEC would then have to tackle an even sharper rise in non-OPEC supply," Commerzbank said.
At Denmark's Saxo Bank, Ole Hansen, head of commodity strategy, noted a turn of sentiment following some optimism the previous week resulting from Chinese central bank intervention, crude oil buying by independent refiners, and "the market mistakenly adopting the narrative of the virus outbreak primarily being a Q1 event."
News reports suggested coronavirus could reach pandemic levels after cases began appearing outside east Asia without a clear link to the assumed source of the virus in China.