WASHINGTON (dpa-AFX) - Oil prices extended recent declines on Monday amid concerns that a coronavirus outbreak in China could cut oil demand by over a 250,000 barrels per day (bpd), in the first quarter of this year.
Benchmark Brent crude shed 0.8 percent to $56.18 a barrel after losing almost 12 percent in January, the steepest monthly decline since November 2018. U.S. crude futures were down 0.3 percent at $51.41 a barrel, after having fallen as much as 15.6 per cent in January, the biggest monthly drop since May.
The Bloomberg reported, citing people with knowledge of China's energy industry that oil demand in the country has dropped by about three million barrels a day, or 20 percent of total consumption amid the virus outbreak. China is the world's largest oil importer.
Several airlines have cancelled flights to China and supply chains across the world's second-largest economy have also been disrupted, prompting its biggest refiner Sinopec to cut output.
Economic data from China added to the gloom as factory activity expanded at its slowest pace in five months in January and industrial firms posted their first annual decline in profits in four years in 2019.
In a bid to support the world's second-largest economy, China's central bank unexpectedly lowered the interest rates on reverse repurchase agreements and pledged to inject $174 billion of liquidity into markets.
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