Meanwhile, Jim Kramer says young investors don't care about fossil fuels: File Image/Pixa Bay
Crude trading on Friday contributed to a fourth straight week of price losses for the commodity, as analysts speculated that the coronavirus, which has spread to over 20 countries, could cut China's oil demand by more than 250,000 barrels per day (bpd).
Worse, analysts for Capital Economics remarked that "Should the coronavirus have a comparable effect as SARS, it could reduce China's oil demand by roughly 400,000 bpd."
They added in a note, "It seems almost certain that the coronavirus will curb Chinese economic growth and commodities demand this quarter."
Jim Cramer, CNBC host
I'm done with fossil fuels ... they're just done
Goldman Sachs weighed in on the outbreak, stating it was likely to shave 0.4 percent from China's economic growth in 2020 and could also negatively impact the U.S. economy.
Yujiao Lei, analyst at Wood Mackenzie, blamed the decline in jet travel on the cut in demand of 250,000 bpd in the first quarter of this year, and the energy consultancy lowered its forecast for world oil demand by 500,000 bpd for the same period.
Friday saw equity markets poised for their first monthly loss since August, with Wall Street's main averages dropping on Friday by over 1 percent; correspondingly, Brent fell 13 cents to settle at $58.16 per barrel (down about 4 percent on the week), and West Texas Intermediate fell 58 cents to $51.56 per barrel (down 4.8 percent on the week).
For those focused on prices, good news on Friday came in the form of the latest Reuters poll, in which 50 economists and analysts surveyed forecast Brent to average $63.48 per barrel and West Texas Intermediate to average $58.22 per barrel - supported by geopolitical risk and the Organization of the Petroleum Exporting Countries' (OPEC) output cuts.
Cailin Birch, analyst at Economist Intelligence Unit, remarked, "Heightened tensions in the Middle East will keep upward pressure on prices, as the risk that U.S. and Iran could accidentally enter into a direct military conflict persists."
Edward Moya, analyst at OANDA, said, "OPEC will come close to balancing the market in 2020 and their deeper than expected cuts will provide a layer of support as oil markets remain fixated on the recent output increase with non-OPEC producers."
Unfortunately, the forecasts put forth in the Reuters polls frequently and often spectacularly prove to be wrong.
As if to summarize the fear and loathing permeating the energy market in general, Jim Cramer, host of CNBC's Squawk Box, on Friday declared, "I'm done with fossil fuels ... they're just done; we're starting to see divestment all over the world.
"You're seeing divestiture by a lot of different funds, [and] It's going to be a parade; it's going to be a parade that says, 'Look, these are tobacco and we're not going to own them.'"
Cramer added that "This has to do with new kinds of money managers who frankly just want to appease younger people."