A pedestrian walks in front of an electric quotation board displaying share prices of world bourses, including the Tokyo Stock Exchange (top C), along a street in Tokyo on January 27, 2020. KAZUHIRO NOGI | AFP via Getty Images

Oil prices slumped to multi-month lows on Monday, with energy market participants increasingly concerned about demand growth as the coronavirus spreads globally. International benchmark Brent crude traded at $58.99 a barrel Monday afternoon, down nearly 2.8%, while U.S. West Texas Intermediate (WTI) stood at $52.70, tumbling over 2.7%. Both crude benchmarks have slipped to lows not seen since early October, as oil traders closely monitor the outbreak of a deadly pneumonia-like virus. On Sunday, Chinese officials confirmed there had been more than 2,700 confirmed cases of coronavirus, including 461 people in a critical condition as the death toll rose to 80. The virus, which started in the Chinese city of Wuhan, has spread to other major cities such as Beijing, Shanghai, Macao and Hong Kong. China has warned the ability of coronavirus to spread is getting stronger, spooking financial markets and prompting a sharp fall in oil prices. Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman said in a statement on Sunday that he was confident the outbreak would be contained.

In an attempt to soothe energy participants' fears, Abdulaziz said, according to a Reuters report, that markets are "primarily driven by psychological factors and extremely negative market expectations adopted by some market participants despite (the virus') very limited impact on global oil demand." When asked whether Middle East producers — such as OPEC kingpin Saudi Arabia — were likely to be much more concerned than they were letting on, John Carey, former deputy CEO of ADNOC Distribution, replied: "I think there is a worry, no question." "Whilst I think oil prices will drop and probably stay down for a few months — as they did after the SARS virus — I think there is a lot of work gone on in the region to actually protect it." "I think it is going to bounce around (and) I think you are going to see spikes," Carey told CNBC's "Squawk Box Europe" on Monday.

'Further weakness is anticipated'

Saudi Arabia's Abdulaziz has insisted that OPEC, along with other allied non-OPEC producers, have the capability to steady the oil market if necessary. The group, sometimes referred to as OPEC+, has been limiting supply to prop up crude futures and recently increased its agreed output reduction by 500,000 barrels per day (b/d) to 1.7 million b/d through March. Tamas Varga, senior analyst at PVM Oil Associates, said Monday that the brokerage had initially expected prices to "bottom out" at around $60 a barrel. But, "the Chinese epidemic has gotten us wrong-footed (and) further weakness is anticipated unless the epidemic is contained." "When it happens, prices are expected to stabilize and start climbing again in case OPEC reduces its production towards the 29 million (barrels per day) mark. Until then bears party in heaven and bulls burn in hell," Varga said in a research note.

An oil tanker sits beside transfer pipes at a terminal as it prepares to unload its cargo of fuel on July 4, 2018 in Zhoushan, China. VCG | Getty Images