Local governments in many cities across China have closed all urban transport network systems and suspended outgoing flights to prevent the spread of the virus. China is the second largest consumer of crude oil.
Brent crude rates dropped sharply to $60.62 per barrel, down by 2.29 per cent from the previous close of $62.07 per barrel on fears of slump in demand. Brent has become cheaper by at least 7 per cent in a week, the biggest drop since December 2018.
West Texas intermediate crude for March delivery fell by 2.5 per cent fell to end at $54.19 a barrel. For the week, the U.S. benchmark fell 7.5 per cent, the largest fall for a most active contract since May.
Angel Broking deputy vice president Anuj Gupta said: "After the trade deal between China and the US, it was believed that the crude rates will pick up due to increased demand. But the outbreak of coronavirus dashed all hopes. Owing to the slump in demand, there is a concern of oversupply which has sent the international crude oil rated in downward spiral."
However, the fall in crude oil rates has brought cheers to Indian consumers as fuel prices in India saw a sharp decline on Saturday. The price of petrol was cut by 27 paise and that of diesel by 30 paise a litre across all major cities on Saturday.
The petrol now costs Rs 74.16 a litre in Delhi, Rs 79.76 a litre in Mumbai, Rs 76.77 a litre in Kolkata and Rs 77.03 a litre in Chennai after the price cut.
Similarly, diesel costs Rs 67.31 a litre in Delhi, Rs 70.56 a litre in Mumbai, Rs 69.67 per litre in Kolkata and Rs 71.11 a litre in Chennai, according to the Indian Oil Corporation website.
The retail prices of fuel are dependent on the international crude prices and the rupee-US dollar exchange rate as India imports almost 80 per cent of its crude requirements.
Domestic petrol and diesel prices are reviewed by oil marketing companies on a daily basis. Price revisions are implemented at the fuel stations with effect from 6 a.m.
( With inputs from IANS )