According to Reuters, Brent crude futures were down 79 cents at $56.88 a barrel. Credits: Glenn Beltz.

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Oil prices have decreased by more than 1% due to worries over the economic impact of the coronavirus Covid-19 outbreak in China and its impact on fuel demand.

According to Reuters, Brent crude futures were down $0.79 at $56.88 a barrel. US West Texas Intermediate (WTI) crude fell $0.57 to $51.48 a barrel.

Last week, the International Energy Agency (IEA) reported that oil demand may decline by 435,000 barrels per day (bpd) in the first quarter of this year due to the coronavirus covid-19 outbreak.

OANDA senior market analyst Edward Moya said: “Oil prices remain heavy as energy traders may have been overly optimistic as to the crude demand impact of the coronavirus, and on fading optimism that OPEC+ will come through with deeper production cuts in March.

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“Optimism that China would see a return to normalcy in travel and trade next quarter was probably wrong… The rest of the world is exercising caution on virus spreading fears and that will do no favours for crude’s demand outlook.”

The death toll from the virus has reached 1,873, with 98 new deaths in China. The number of cases of infection has increased to 73,000 globally as of the end of 17 February. The total number of disease recoveries stood at 12,552.

Meanwhile, investors expect that the OPEC+ Group will approve a plan to deepen production cuts. They believe this will support oil prices and tighten supplies worldwide.

It has agreed to cut oil output by 1.7 million barrels per day (Mmbpd) until the end of next month.

In another development, Reuters reported that Libya will face a financial crisis this year. Groups loyal to eastern-based commander Khalifa Haftar have closed oil terminals and oil fields.