The spread of the coronavirus around the world is sending shockwaves through an oil market ill-prepared for a serious blow to energy demand.
The outbreak is the biggest shock to demand for oil since the 2008 financial crisis.
US crude dropped another 2.3% on Wednesday to $48.73 a barrel. That’s the lowest price since January 2019 and it marks a 23% plunge from the recent peak of $63.27 a barrel on January 6.
Citing the coronavirus, on Wednesday, Goldman Sachs told clients it is cutting its 2020 oil demand forecast in half to just 600,000 barrels per day.
“If the coronavirus spreads further globally, then we expect further downside risk to our estimates,” Goldman Sachs analyst Brian Singer wrote in a report.