(Bloomberg) -- Oil declined the most in two weeks as shock waves from the spreading coronavirus triggered the first drop in U.S. business activity in seven years.
Crude futures fell as much as 2.5% in New York on Friday. China rejiggered how it calculates infections totals for the third time in a month, raising questions about data reliability, and infections spread in Japan, South Korea and the Middle East. Meanwhile, a key IHS Markit gauge of factories and service providers in the world’s largest economy dropped, sparking selloffs in government bonds and equities.
“The market is hypersensitive at the moment,” says Bill Farren-Price, a director at consultant RS Energy Group. If the virus “continues to spread outside of China then the fear is we’ll see weak growth and demand from other economies as well.”
Oil has fallen 14% this year as China’s viral outbreak crippled industrial activity and transportation at a time when energy supples already were abundant. The World Health Organization said if countries don’t respond strongly now, the spread outside China may become a wider threat.
See also: Vitol Sees Oil Recovery This Year After Slump From Virus
West Texas Intermediate for April delivery fell 93 cents to $52.95 a barrel at 11:09 a.m. on the New York Mercantile Exchange. Brent for April settlement declined $1.30 to $58.01 on the ICE (NYSE:ICE) Futures Europe exchange.
