A potential drop in oil demand from China due to the outbreak of a new coronavirus could hurt crude prices by about $3 per barrel, Goldman Sachs said

The new virus has worried financial markets as investors recalled the Severe Acute Respiratory Syndrome (SARS) epidemic in 2002-2003, also a coronavirus outbreak that started in China and killed nearly 800 people worldwide.

"Translating the estimated SARS demand impact into 2020 volumes points to a potential 260,000 barrels per day negative shock to global oil demand on average," Goldman said. The estimate includes a 170,000 barrels per day loss of jet fuel demand, it added.

The bank expects jet fuel markets, including cracks, regrade and Asian differentials, to be hit the most if the outbreak leads to a decline in regional air travel.

While a supply response from the OPEC could limit any fundamental impact from such a demand shock, the initial uncertainty could lead to a larger oil price sell-off, Goldman added.