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Oil plunges to 3-month low, as demand fears grow by China virus

UNITED STATES (OBSERVATORY NEWS) — Crude futures fell 2 percent to a three-month low on Monday, as the death toll from coronavirus in China rose, dampening travel and fueling expectations for a slowdown in oil demand.

The settlement price for Brent crude was set at 59.32 dollars a barrel, down 1.37 percent, or 2.3 percent, and recorded its lowest level since October 21. US crude closed at $ 53.14 a barrel, down $ 1.05 or 1.9 percent, at the lowest price since October 2.

Global stock markets, whose effects are usually being tracked, have also tumbled as investor anxiety grows over an expanding crisis. The demand for safe-haven assets, such as the Japanese yen and treasury bonds, has boomed.

The death toll from the coronavirus has risen to 81 and the Chinese government has decided to extend the Lunar New Year holiday to February 2, to keep as many people as possible in their homes and prevent further spread of the virus.

“This thing is still looking ugly, so oil has been hit hard because it could turn into a sharp drop in demand even at least for some time,” said John Kilduff, from Again Capital in New York.

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