By Sarah Toy
Oil prices fell again Tuesday, weighed down by investors' concerns about how the spread of t he coronavirus outside China will affect global oil demand.
U.S. crude prices fell 1.5% to $50.66 a barrel in morning trading after falling 3.7% on Monday. Brent, the global gauge of prices, declined 1.2% to $55.61 a barrel after dropping 3.8% the day before.
Investors were still trying to gauge the fallout from the virus. Although China is seeing a drop in new coronavirus cases, outbreaks continue to grow outside the country, spooking investors who had thought the worst had passed.
"Recent developments and signs of worsening outbreaks in countries such as Iran, Italy and South Korea have severely dented this foundational assumption, forcing markets to re-assess the severity of the headwinds ahead," analysts at IHS Markit wrote in a Tuesday note.
Prices were also under pressure from a rift in the partnership between Russia and the Saudi Arabia-led Organization of the Petroleum Exporting Countries that could weaken the cartel's ability to influence prices. Saudi Arabia is considering a break from its four-year oil-production alliance with Russia after the country rejected a Saudi push to deepen the alliance's existing oil production curbs by 600,000 barrels a day.
Elsewhere in commodities, most-active gold futures pared some of their Monday gains, falling 1.2% to $1,656.70 a troy ounce. The precious metal jumped to a seven-year high on Monday, as investors sought havens amid rising fears about the economic impact of the coronavirus epidemic.
"Gold prices are softer as markets take a day to process yesterday's market carnage," wrote Edward Moya, senior market analyst at Oanda, in a note.
Natural-gas prices, meanwhile, edged up 0.9% to $1.843 per million British thermal units after falling 4% on Monday on warmer weather forecasts.
Write to Sarah Toy at firstname.lastname@example.org
(END) Dow Jones Newswires
February 25, 2020 12:20 ET (17:20 GMT)
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