The outbreak of a new strain of coronavirus in China could have a negative impact on crude oil demand, Goldman Sachs has said.

The Senior Commodity Strategist at Goldman Sachs, Damien Courvalin, said the global oil demand could potentially fall by 260,000 barrels per day, hitting the aviation sector the hardest, according to Offshore Technology.

He said, “Ultimately we expect jet fuel markets — including cracks, regrade and Asian differentials — to decline most if this outbreak persists given the likely decline in regional air travel.”

Analysts at London-based consultancy firm Energy Aspects said they did not expect the oil demand to fall significantly as the virus had not yet triggered the restrictions on travel and trade that were set in place during the 2002-2003 SARS crisis.

Energy Aspects said in a research note, “While the SARS outbreak was estimated to have impacted up to 0.26 mbpd of oil demand globally, according to anecdotal reports, we currently do not expect global oil demand to fall significantly as a result of the coronavirus.”

Voluntary trip cancellations are expected, said Energy Aspects, but as the spread of the coronavirus has been minimal outside of China, it should not impact significantly the global demand for transportation fuel.

“The World Health Organisation is currently hesitant to declare the coronavirus a public health emergency, meaning airline cancellations remain unlikely.”

Even though the Chinese government this time has taken a more efficient approach to the spread, the firm said if Chinese authorities decided to implement more aggressive measures to contain the outbreak, global oil demand could be more affected.

“In a worst-case scenario that assumes the outbreak spreads across the nation, we expect jet demand growth to slow to 20,000 bpd year-on-year after having grown by 75 thousand bpd year-on-year in H2 2019,” Energy Aspects said in its report.

Originating in Wuhan – the capital of China’s Hubei province with a population of more than 11 million people – the coronavirus has spread to other countries, including Japan, South Korea and the US.

According to the latest reports, 582 cases have been confirmed including 17 deaths, prompting Chinese authorities to impose a lockdown on Wuhan and some other cities.

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