Oil is on track for its worst week since July amid coronavirus fears

Futures of West Texas Intermediate crude slipped 2.72% to $54.08 per barrel, and ICE Brent crude fell 2.6% to $60.44 per barrel as of 12:22 p.m. in New York.
Chinese stocks also fell. The outbreak of coronavirus has disrupted the Lunar New Year, an important holiday where hundreds of millions of people in Asia travel .
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Oil prices slumped Friday, putting the commodity on track for its worst weekly performance in six months amid mounting worry that the coronavirus outbreak in China will curb fuel demand.

Futures of West Texas Intermediate crude slipped 2.72% to $54.08 per barrel, and ICE Brent crude fell 2.6% to $60.44 per barrel as of 12:22 pm in New York. Prices are set to drop as much as 6.8% this week, the largest weekly drop since July.

Fears of the Wuhan virus come after a number of challenges have affected the price of oil in recent weeks. In early January, tensions in the Middle East, as well as optimism around the January 15 signing of a phase-one trade deal between the US and China, sent prices higher .

But on Wednesday, Goldman Sachs warned that China's coronavirus could lower oil prices by as much as $3, CNBC reported .

On Friday, the number of deaths from coronavirus rose to 26 and confirmed cases worldwide grew to at least 830 people. In China, travel restrictions were expanded for more than 40 million people as officials race to contain the virus. In the US, the second case of coronavirus was confirmed in Chicago. There is one other confirmed case of the virus in Washington state.

The outbreak of coronavirus has disrupted the Lunar New Year, an important holiday where hundreds of millions of people in Asia travel . Chinese stocks have also taken a hit amid fears that the virus will spread, and the yuan has pared losses .

It's also reminiscent of the severe acute respiratory syndrome (SARS) outbreak of 2003 , which cost the world economy as much as $40 billion, CNN reported , citing a study from the National Institutes of Health. Economic growth in China dropped by about 2% following the SARS contagion, Daniel Ghali, a commodities strategist at TD Securities told Bloomberg .

Thus far, it looks like the Wuhan virus isn't as severe as SARS. If that is the case, the impact of the virus on the Chinese economy will be "modest with short-term disruptions, " according to a Thursday note from Helen Qiao, China and Asia economist at Bank of America.