Saudi Arabia's Energy Minister Prince Abdulaziz bin Salman Al-Saud said on Monday the kingdom was closely monitoring developments in global oil markets resulting from "gloomy expectations" over the impact of the new coronavirus on the Chinese and global economy and oil market fundamentals, Reuters reports.
Prince Abdulaziz said he was confident the Chinese government and international community could contain the spread of the virus and fully eradicate it.
The minister said the impact on global markets, including oil and other commodities, was "primarily driven by psychological factors and extremely negative expectations adopted by some market participants despite its very limited impact on global oil demand."
US shares and crude prices had fallen sharply on Friday as investors moved into safe-haven assets amid concerns that the spreading virus from China would curb travel and hurt economic demand.
Crude prices sank more than 2% on Friday and Brent logged its biggest weekly decline in more than a year on concerns that the virus will spread farther in China, the world's second-largest oil consumer, curbing travel and oil demand.
"Such extreme pessimism occurred back in 2003 during the SARS outbreak though it did not cause a significant reduction in oil demand," Prince Abdulaziz said.
He also said he was confident the kingdom and other OPEC + producers had the capability and flexibility to respond to any developments to maintain oil market stability if needed.
Health authorities around the world are racing to prevent a pandemic after more than 2,000 people were infected with the new virus in China and 56 died after contracting the virus.
The newly identified coronavirus has created alarm because much about it is still unknown, such as how dangerous it is and how easily it spreads between people. It can cause pneumonia, which has been deadly in some cases.