Brent crude was down 64 cents at $58.67 a barrel. Credit: Geof Wilson.

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Oil prices have declined by 1% as the spread of the coronavirus Covid-19 outbreak outside of China has compounded concerns over demand.

According to Reuters, Brent crude was down $0.64 at $58.67 a barrel. US West Texas Intermediate (WTI) crude futures dropped $0.54 at $53.34 a barrel.

Experts also attribute the fall in oil prices to the reluctance of major crude companies to cut their production to support the market.

The death toll from the virus has increased to more than 2,247 as of the end of 20 February. The total number of recoveries now exceeds 18,400.

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Hubei province in China reported 11,788 recoveries and 4,094 suspected cases. Wuhan, the epicentre of the Covid-19 outbreak, has the majority of cases in the province.

The virus has now spread to South Korea’s fourth-largest city, Daegu. Reported cases of the virus have also increased in China, the world’s biggest importer of crude oil.

Stratfor oil analyst Greg Priddy said: “I think there is a lot of reason for caution right now, as the impact of coronavirus on demand is still unclear.

“If it begins to look like the impact will be modest, that could affect Russia’s decision at the 5-6 March OPEC+ meeting on whether they are willing to endorse a further cut.”

Meanwhile, OPEC+ has been withholding supply from the market to support prices. Many analysts expect further restrictions on production.

Reuters also said that tensions in the Middle East affected oil prices. This comes after Saudi Arabia announced the interception and destruction of several ballistic missiles launched by the Houthi militia towards Saudi cities.