Energy companies saw their shares fall on Monday as concern about the spread of the deadly coronavirus sent crude oil prices tumbling.
The price drop responded to a fall in oil prices. Brent crude was down 2.6% to $58.36 and West Texas Intermediate was off 2.4% to $52.87.
"Macro concerns over energy demand due to curtailed movement of people and trade have been weighing on an oil market that is otherwise tight due to ongoing supply concerns in Libya and OPEC+ output cut," ING said Monday in its commodities report.
China confirmed 81 deaths and more than 2,800 cases of the virus, but warned its incubation period could be as long as 14 days, complicating efforts to screen and detect those who may be potentially carrying the virus.
Saudi Arabia’s Energy Minister Prince Abdulaziz bin Salman Al-Saud said in a statement that he was confident the Chinese government and international community could contain the spread of the virus and fully eradicate it, Reuters reported.
He added that the impact on global markets, including oil and other commodities, was “primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite its very limited impact on global oil demand.”
In addition, the statement said that "such extreme pessimism occurred back in 2003 during the SARS outbreak though it did not cause a significant reduction in oil demand."
"The Energy Minister stressed that the Kingdom of Saudi Arabia and other OPEC+ producers have the capability and flexibility needed to respond to any developments, by taking the necessary actions to support oil market stability, if the situation so requires," the statement concluded.
In addition to oil, airline stocks were getting walloped Monday as the coronavirus outbreak sparked travel bans in China.