Crude oil futures failed to hold early gains and settled lower on Tuesday, weighed down by concerns over the outlook for energy demand amid the rapidly spreading coronavirus outbreak in China.
Traders were cautious with their moves ahead of weekly crude inventory reports from the American Petroleum Institute (API) and Energy Information Administration (EIA). While API is scheduled to release its report later today, the EIA’s data is due out Wednesday morning.
West Texas Intermediate Crude Oil futures ended down $0.50, or about 1%, at $49.61 a barrel, well off the day’s high of $51.55 a barrel. That was the lowest settlement since January 2019.
Brent Crude oil futures were down $0.44 at $54.01 a barrel around late afternoon.
On Monday, WTI crude oil futures for March ended down $1.45, or 2.8%, at $50.11 a barrel.
The surprise rate cut by the Chinese central bank on Monday and expectations of more stimulus measures sometime soon, and output reductions by OPEC and allies, limited oil’s downside today.
Death toll in mainland China from the coronavirus rose to 425. China said it would welcome assistance from the United States to fight the virus outbreak.
Saying that the crisis was “a major test of China’s system and capacity for governance,” China’s leader, Xi Jinping, has signaled a more assertive strategy for dealing with the virus outbreak.