Fears of falling crude demand due to the coronavirus outbreak has continued to batter oil prices. U.S. West Texas Intermediate crude (WTI) posted its fifth straight session of losses while international benchmark Brent crude fell to its lowest level since Dec. 2018. Oil prices are now more than 10 percent lower than the levels seen just last week.
The steep decline in oil prices has been alarming. WTI tumbled deeper into bear market territory to a low of $45.88 per barrel. The last time prices were that low was Jan. 2019. It is currently sitting 29 percent below its 52-week intraday high level of $66.60, reached last April. Brent crude fell to $50.97 per barrel.
Earlier this week, WTI entered a death cross, which is when the 50-day moving average falls below the 200-day moving average. It’s the first time this has happened since July, and just the seventh time it has happened over the last 30 years. The next WTI support level to watch is around the $42.50 mark, which was last reached in Dec. 2018.
The market fears a coronavirus pandemic could severely damage global economic growth and destroy more oil demand in the coming months. The outbreak is spreading fast outside of China. The virus has spread to several large economies, including South Korea, Japan, and Italy. In Italy, there are 530 cases of coronavirus infections with 42 recoveries and 14 deaths.
Lower oil prices can be good for consumers at the pump, but softer demand can mean a slowdown in economic growth. The crude market is now watching for possible deeper output cuts by the Organization of the Petroleum Exporting Countries and its allies including Russia, a group known as OPEC+. The group is scheduled to meet in Vienna next week from March 5-6.