Oil prices dropped following news of the coronavirus outbreak, mainly concentrated in China.
The oil market in understandably concerned when China is impacted, as the nation is the world's largest crude oil importer, importing 10.12mn barrels per day in 2019, according to the General Administration of Customs.
Brent crude dipped to just under $60 per barrel for the first time in 2020, and WTI sat at $54 per barrel as of writing.
The coronavirus was identified on 31 Dec 2019 in Wuhan, China, and has spread to South Korea, Thailand, Vietnam, Japan, and the US.
With millions in China facing travel restrictions during the Chinese New Year, jet fuel demand will likely be impacted.
“When cities are placed under quarantine, and public transit is shut down, by definition that reduces economic activity and has a negative impact on energy demand, oil included,” John Freeman, a Raymond James analyst, said in a note to clients. “Once there is evidence that the outbreak is contained and thus economic disruption subsiding, sentiment on oil should improve, bringing prices back up.”