With the World Health Organisation (WHO) declaring aglobal health emergency and millions of Chinese citizens in quarantine andlockdown, the coronavirus is taking an economic toll as well as amedical one.
A number of leading tech firms, such as Amazon, Microsoftand Google, have temporarily closed all of their offices in China, whilemajor Chinese manufacturers like Foxconn have suspended operations in certaincities.
This general decline in economic activity is expected bysome to weigh on China's purchasing of commodities such as oil.
According to the latest data, China's crude oil importsfrom the world's largest supplier Saudi Arabia rose by almost 47 per cent in2019 year-on-year.
This surge was thanks in large part to a new marketingstrategy by the state-backed oil and gas firm Saudi Aramco, which signedat least two new supply agreements with private refiners in China.
Speaking last week before the scale of the virus grew to itscurrent extent, Saudi Arabia's energy minister, Prince Abdulaziz bin Salman,stated that the kingdom was "closely monitoring" the effect of the virus on themarket.
Nonetheless he argued that that week's drops were "primarilydriven by psychological factors and extremely negative expectations adopted bysome market participants, despite its very limited impact on global oildemand."
Oil prices have fallen throughout this week, although bymid-morning trading on Friday Brent Crude Oil Futures were up 0.46 percent at $58.56 per barrel while WTI Oil Futures gained 0.35 per cent at $52.32per barrel.
With tensions between the US and China somewhat reduced bythis month's initial phase-one trade deal, Chinese imports of American oil areexpected to surge in 2020. However, should the coronavirus continue to hobblethe nation and its economy then oil imports from all suppliers will beaffected.