Oil prices have fallen further due to fears over the worsening coronavirus crisis in China. Credit: AirBeagle.

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Oil prices have fallen further over concerns that the coronavirus in China could drive a reduction in demand.

According to Reuters, Brent crude futures fell by $1.28 to $59.41 a barrel, while US West Texas Intermediate (WTI) crude was down by $1.24 to $52.95 a barrel.

Saudi Arabia Energy Minister Prince Abdulaziz bin Salman Al-Saud expressed confidence in the suppression of the new virus.

Prince Abdulaziz said that the price fall is ‘primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite (the virus’s) very limited impact on global oil demand’.

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Abdulaziz added: “Such extreme pessimism occurred back in 2003 during the SARS outbreak though it did not cause a significant reduction in oil demand.”

OPEC+ alliance, which has been curbing supply to support oil prices, has recently increased its agreed output reduction by 500,000bpd to 1.7 million barrels per day until March.

Prince Abdulaziz said that OPEC+ aims to cut seasonal inventory builds that typically occur in the first half of this year.

He also said that all options will be open when OPEC+ meets in Vienna in March.

Goldman Sachs said: “Investor fears on oil demand have risen considerably, driven by unfavourable US inventories and … concerns on impact from the coronavirus outbreak.”