(Bloomberg) -- Oil extended declines from the lowest close in seven weeks on speculation China’s coronavirus outbreak may dent demand as the market tackles a glut of global crude supplies.

Futures lost 1% in New York as Chinese officials halted travel from Wuhan, the city at the epicenter of the outbreak. U.S. industry data signaled American crude stockpiles expanded further after Goldman Sachs Group Inc. warned that the virus may lead to a hit to oil demand. Concerns over the virus also weighed on broader market sentiment with Asian stocks declining.

The outbreak ahead of the Lunar New Year that marks the peak of the biggest human migration in the world, threatens to derail energy demand from the biggest consumer. The International Energy Agency says the world is “awash with oil,” while Goldman predicts the virus may crimp global consumption by 260,000 barrels a day this year, if the SARS epidemic in 2003 is any guide.

“The fear of a coronavirus pandemic depressing oil demand by curbing travel and trade is a real one,” said Vandana Hari, founder of industry consultant Vanda Insights in Singapore. Until there is word from WHO on whether to declare the outbreak an international emergency, “cautious selling will likely prevail,” she said.

West Texas Intermediate futures for March delivery fell 82 cents to $55.92 a barrel on the New York Mercantile Exchange as of 9:10 a.m. in Singapore after dropping as much as 1.5% earlier. The contract lost 2.8% on Wednesday. Brent futures declined 83 cents, or 1.3%, to $62.38.

China banned travel from Wuhan, a city of 11 million, in efforts to stop the spread of the new SARS-like virus that has claimed at least 17 lives so far and infected hundreds. The World Health Organization delayed a decision on whether to declare the outbreak an international emergency.

--With assistance from James Thornhill.

To contact the reporter on this story: Saket Sundria in Singapore at ssundria@bloomberg.net

To contact the editors responsible for this story: Serene Cheong at scheong20@bloomberg.net, Ben Sharples, Andrew Janes

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