Oil loses .. Goldman Sachs: Corona virus damages the economy of China and America

Investment bank Goldman Sachs said on Friday that the outbreak of the Corona virus is likely to cut 0.4 percentage points from China's economic growth in 2020, and it will also have a less negative impact on the growth of the US economy.

This comes amid fears of the impact of the virus on levels of oil demand in the markets.

Goldman Sachs estimates that the growth of the US economy will decline 0.4 percentage points in the first quarter, but he said that growth is likely to recover in the second quarter "which will lead to a small net decline in growth in America in the entire 2020".

The bank revised its forecast for China's GDP growth this year to 5.5% from 5.9%.

Meanwhile, analysts and dealers said that the outbreak of the Corona virus in China may reduce the demand for oil by more than 250 thousand barrels per day in the first quarter of this year, and cause the price of oil, which is already besieged with a surplus of supplies, to drop.

And the demand for jet fuel in China will receive the most damage - as China is the largest oil importer, and it is also one of the fastest growing aviation markets - due to severe travel restrictions limiting domestic flights, while international airlines are avoiding the country.

Strict restrictions
Many Chinese cities have imposed severe travel restrictions, and international airlines have suspended or reduced direct flights to major cities in China.

Consultancy firm JLC said that Chinese refineries activity fell by 15% last week.

A Chinese agency dealing with international trade said today that it would provide funds to enforce the force majeure situation of companies unable to fulfill contracts as a result of the virus.

FGE Energy estimated the decline in oil demand to be up to 840 thousand barrels per day in February, but the market appears to be coming to influence the broader economy if efforts to contain the disease fail.

The virus has spread to more than 9,800 people worldwide, exceeding the total incidence of the SARS epidemic in 2002 and 2003, and killing 213 people, all of them in China.