Oil falls in Asia on swine flu fall-out
Crude prices continued to decline during Asian trade Tuesday amid worries that an outbreak of swine flu globally would hurt air travel, thereby reducing oil demand, analysts said.business Updated: Apr 28, 2009 08:31 IST
Crude prices continued to decline during Asian trade Tuesday amid worries that an outbreak of swine flu globally would hurt air travel, thereby reducing oil demand, analysts said.
New York's main contract, light sweet crude for June delivery, dropped 20 cents to 49.94 dollars a barrel.
Brent North Sea crude for June delivery was off six cents to 50.26 dollars.
"Concerns that the outbreak of swine flu may discourage air travel were a negative for the oil price," said David Moore, a commodity analyst with the Commonwealth Bank of Australia in Sydney.
The swine flu outbreak that began in Mexico has raised fears of a global pandemic after suspected and confirmed cases were
detected in parts of Europe, the United States and New Zealand.
Analysts said swine flu, a contagious and sometimes fatal respiratory disease among pigs, has the potential to affect the global aviation industry if the outbreak escalates further.
The last time an epidemic hurt the aviation sector was in 2003 when the Severe Acute Respiratory Syndrome (SARS) curbed air travel and sent the sector into a tailspin.
The World Health Organization on Monday raised its flu pandemic alert level from three to four, signalling a "significant increase in risk of a pandemic" under its criteria.
"For the moment, the initial flu news has created the spectre of a potentially globally economic depressing event just as the markets were evaluating the prospects for economic recovery," said JP Morgan Research analyst Lawrence Eagles.
"An event of legitimate severity would be bearish for both crude and transportation fuel prices."