Brent, the UK-traded global benchmark for crude oil, settled down 71 cents, or 1.2 percent, at $56.52 on Friday. Brent struck a four-month low of 55.94 in intraday trade. West Texas Intermediate (WTI), the US benchmark, closed the day down 58 cents, or 1.1 percent, at $51.56 per barrel. WTI reached a near six-month low of $50.98 in intraday trade.
With Friday also being the last day for January, Brent posted a monthly loss of just over 14 percent, its biggest decline since November 2018, when it plunged over 22 percent. WTI lost nearly 16 percent for January, its worst performance since May.
Analysts predicted the red streak in oil would continue as long as the China economy remained crippled by the coronavirus crisis.
"I could see more weakness in WTI and Brent coming due to lower refinery runs" in February, Scott Shelton, energy futures broker at ICAP in Durham, North Carolina, said in a note.
China has reported more than 200 deaths and 10,000 infections from the coronavirus and whole industries from travel to automobile manufacturing have virtually come to a standstill in the world’s number two economy.
Wall Street investment bankers say lost consumption of energy globally from the crisis in China could run into hundreds of thousands of barrels per day for both crude oil and jet fuel. The impact on China alone has been withering enough for Goldman Sachs to revise down the country’ 2020 GDP growth expectations to 5.5% from 5.9%.