OIL prices fell  on Tuesday as fears of demand disruption amid the coronavirus outbreak continue to weigh on market sentiment.

Brent Crude was traded down 0.81 per cent at $55.32 while  WTI was down 1.01 per cent at $50.91.

Nigeria, Africa’s largest economy has a budget of N10.59 trillion for this year benchmarked against oil price of $57 per barrel and daily production of 2.18million.

Oil prices were seesawing early in the day as market participants were chasing positions at bargain prices after Monday’s plunge, awaiting a clearer price catalyst with the API inventory report later in the day.

The market began to panic last Friday that the coronavirus outbreak reaching Europe and the Middle East would depress global economic growth and, by extension, further hurt oil demand growth.

Oil ended on Friday with a tentative price recovery, which was fueled by hopes that the Chinese outbreak may soon be contained and that the Chinese authorities would be rolling out stimulus to help the economy to recover from the outbreak-inflicted slowdown.

But over the weekend, South Korea reported a jump in infections, and Italy reported first deaths in what is so far the worst outbreak of the coronavirus outside Asia with more than 280 people infected as of early yesterday.

“Concerns over the rising number of Covid-19 cases outside China continues to weigh on sentiment, and market participants are likely to remain cautious until there is a sign of a peak in of cases outside China,” ING strategists Warren Patterson and Wenyu Yao said yesterday.

The fear of further oil demand loss continues to outweigh an already month-long supply outage with the blockade of key Libyan oil export terminals, which has decimated production and exports from the OPEC producer that pumped more than 1 million bpd before the blockade by forces loyal to General Khalifa Haftar.