By David Hodari
Oil prices plunged to multiyear lows Friday, with Brent crude on course for its worst week since the financial crisis as the selloff driven by coronavirus fears accelerated.
Brent crude dropped below $50 a barrel for the first time in 2 1/2 years and was last down 3.1% at $50.13 a barrel, on track for its lowest close since July 2017. That would mean the global benchmark will have suffered its sharpest weekly drop -- some 15% -- in more than 11 years.
The main U.S. oil-price gauge, West Texas Intermediate, was down 4.2% at $45.09 a barrel, breaking fresh 13-month lows and again on course for its lowest closing price since December 2018.
"We're still in the fear phase with [coronavirus] cases rising across Europe," said Edward Marshall, a commodities trader at Global Risk Management.
Other industrial commodities also came under pressure, with London Metal Exchange three-month copper futures falling 1.6% at $5,563 a metric ton.
Precipitous declines in risk assets around the world accelerated on Friday as oil and oil products continued to reflect investors' worries about how the spread of the coronavirus will affect demand.
"There is now the real danger of a major economic shutdown in large parts of the world as the coronavirus is now spreading rapidly, with a potential huge downward impact on oil demand," said Fereidun Fesharaki, chairman of FGE, an energy consulting group.
Italy's coronavirus outbreak is being linked to a growing number of infections around Europe, prompting nations and corporations to scale down travel. European budget airline easyJet became one of the growing list of airlines to cut back on continental flights, cancelling some of its flights to and from Italy for the second half of March.
Assets exposed to oil also received a hammering from anxious investors.
The currencies of major oil exporters continued to drop against the U.S. dollar, with the Russian ruble down 1.5%, extending its weekly fall to 4.7%. The Norwegian krone and the Canadian dollar were also down against the dollar, while the Japanese yen, a haven asset, rose 0.8%.
Oil and gas stocks also took a beating, with that sector of the Stoxx Europe 600 down 3.2%. Major international oil companies have so far held up better than their smaller competitors.
"It's about survival and you want to own the companies you think will be around," said Royal Bank of Canada Capital Markets equity research director Biraj Borkhataria.
But signs of stress are now starting to show in the share prices of the world's biggest oil names, he added. "You're starting to see a focus on leverage and balance sheets and the names now underperforming are the more leveraged ones...BP is starting to crack and it has the highest gearing in the sector."
Shares in London-based BP PLC were last down 4.3%, having shed more than 12% of their value so far this week.
With oil now in bear-market territory, the Organization of the Petroleum Exporting Countries and its allies are due to meet next week in Vienna. Investors are watching to see whether Saudi Arabia, the de-facto leader of OPEC, is able to convince Russia, which effectively heads the "plus" faction of allies outside the cartel, to deepen the alliance's four-year-old production cuts.
A joint technical committee meeting earlier in February recommended deepening cuts but Moscow has repeatedly demurred on the issue.
"There are two fears hitting oil: one is risk-off selling across assets and at the same time we're not seeing a sufficient production cut," said Xiao Fu, head of commodities research at BOCI Global Commodities.
Some traders remained optimistic, though.
"I think they'll surprise the market as OPEC's been abnormally quiet even as oil's been falling like a hot knife through butter," said Global Risk Management's Mr. Marshall. "I think the fireworks will come out on Thursday but until then it's freefall."
Write to David Hodari at David.Hodari@dowjones.com