Oil headed for a 5% loss this week amid fears that China’scoronavirus will erode fuel demand just as markets struggle with a fragile world economy and adequate supplies.

Futures held above $55 a barrel in New York, buoyed by an unexpected drop in U.S. crude inventories and a political crisis in Libya that has halted the OPECmember’s oil exports. Yet the signs of tighter supply paled against the International Energy Agency’s assessment that “the world is awash with oil,” a surplus that could grow if the virus outbreak hits consumption of jet fuel in China, the world’s biggest oil importer.

West Texas Intermediate futures for March delivery slipped 16 cents to $55.43 a barrel on the New York Mercantile Exchange as of 10:31 a.m. in London. Prices are poised for a third weekly drop after closing at the lowest level since Nov. 29 on Thursday. Brent crude fell 23 cents to $61.81, and was also set for a third weekly decline.

Source : Bloomberg