Prices of oil see largest monthly decline since May

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Brent crude was up 20 cents at $58.49 a barrel by 1208 GMT but still down 3.6 per cent on the week. On Thursday, the contract on MCX fell to a three-month low of 3,712 rupees a bbl and the contract on NYMEX declined to $51.66 per bbl.

The main catalyst for the sell off was the coronavirus, which has reduced demand for jet fuel because of the cancellations of more than 3,000 flights a day in and out of China, but also because of fears that the contagion could spread into the broader economy.

In China, the death toll has climbed to 170 people.The World Health Organisation's Emergency Committee is set for another meeting later on Thursday to reconsider whether the rapid spread of the virus should now be called a global emergency.

The collapse in Chinese oil consumption is starting to reverberate across the global energy market, with sales of some crudes slowing to a crawl and benchmark prices in free-fall.

The increase in USA crude stockpiles was the largest since the week ending November 1, according to Energy Information Administration data.

"Our strategists suggest oil markets appear to be pricing in a demand shock equivalent to that seen during the SARS outbreak in 2003", wrote John Normand, head of cross-asset fundamental strategy at J.P. Morgan Chase & Co.

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U.S. West Texas Intermediate (WTI) futures CLc1 were up by 70 cents to $52.84 a barrel.

OPEC members and their ally Russian Federation will convene a technical meeting this week to analyse oil price falls since the outbreak of a coronavirus epidemic, a source close to the cartel said on Sunday.

A Reuters poll on Friday indicated oil prices should remain supported near current levels this year as political risks and OPEC-led output curbs offset growing supply.

Oil prices jumped on Friday following sharp losses this week, as the World Health Organization (WHO) came out against travel and trade restrictions in declaring a global emergency over the spread of the coronavirus that originated in China previous year.

However, the bulls lacked vigor amid the rapid spreading virus internationally and as markets continue to assess its economic implications.

The coronavirus outbreak could cut China's oil demand by more than 250,000 barrels per day (bpd) in the first quarter of this year and drag on oil prices already beleaguered by oversupply, analysts and traders say.

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