Oil futures remained under pressure Tuesday, seeing modest losses a day after worries about the spread of COVID-19 outside China sent crude tumbling.
West Texas Intermediate crude for April delivery CLJ20, -0.02% fell 11 cents, or 0.2%, to $51.32 a barrel on the New York Mercantile Exchange, while May Brent crude BRNK20, -0.23% dropped 25 cents, or 0.4%, to $55.52 a barrel.
“Concerns over the rising number of COVID-19 cases outside China continues to weigh on sentiment, and market participants are likely to remain cautious until there is a sign of a peak” in cases outside of the country, said Warren Patterson, head of commodities strategy at ING, in a note.
WTI, the U.S. benchmark, dropped 3.7% on Monday, while Brent, the global benchmark, shed 3.8%, as investors fled assets perceived as risky, including equities, and piled into traditional havens like gold GCJ20, -1.59% and U.S. Treasurys TMUBMUSD10Y, +0.31%. The move came after a jump in the number of cases outside China of the disease caused by the novel coronavirus that emerged in Wuhan, China, late last year.
Fears the coronavirus would dent demand for crude in China pressured oil prices earlier this year, pushing the commodity into a bear market. The spread of the disease outside of the country and fears it could have further implications for supply chains and the global economy have contributed to recent weakness, alongside uncertainty over the ability of the Organization of the Petroleum Exporting Countries, or OPEC, and its allies to respond with additional production cuts amid signs of strain between Saudi Arabia and Russia.
April natural gas NGJ20, +1.03% gained 1.2% to $1.866 per million British thermal units.