By Noreen Burke
Investing.com - Crude oil prices fell to their lowest levels in 14 months on Wednesday, extending losses into a fourth day as concerns about the spread of the coronavirus and its impact on oil demand weighed.
U.S. West Texas Intermediate crude hit an intra-day low of $49.01, the weakest level since Jan. 8 2019 and was at $49.44, off 0.92% by 04:42 AM ET (0942GMT). Brent crude fell 56 cents, or 1.0%, to $53.68 a barrel.
The U.S. Centers for Disease Control and Prevention (CDC) warned Americans on Tuesday to prepare for a likely pandemic.
That warning contradicted claims by White House economic advisor Larry Kudlow, who told CNBC that “We have contained this, I won’t say airtight, but pretty close to airtight.”
Asia reported hundreds of new coronavirus cases on Wednesday, including the first U.S. soldier to be infected and outbreaks in Italy and Iran spread to other countries.
"The shift in focus from just an external demand shock from China to an overwhelming U.S. economic blow could send oil prices into a faster tailspin," Stephen Innes, market strategist at AxiTrader, said in a note.
"The reality is that the coronavirus has not been contained and is now spreading like wildfire across the world, and you can't put that smoke back in the wood," he said.
Oil prices had risen earlier on short-covering and amid hopes for deeper output cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, a group known as OPEC+.
"But the upside was limited as risk of the coronavirus outbreak hitting oil demand is growing," said Hideshi Matsunaga, analyst at Sunward Trading.
OPEC and OPEC+ are due to meet in Vienna over March 5-6.
"A weekly close below $55.00 a barrel on Brent crude will have the alarm bells ringing amongst the OPEC+ grouping," Jeffrey Halley, senior market analyst at OANDA said in a note.
Saudi Arabia's energy minister said on Tuesday he was confident that OPEC and its partners would respond responsibly to the spread of the virus.
The International Energy Agency's (IEA) outlook for global oil demand growth has fallen to its lowest level in a decade, Executive Director Fatih Birol said on Tuesday, adding it could be reduced further due to the outbreak.
U.S. crude inventories are expected to rise for a fifth week running. The American Petroleum Institute (API) said late Tuesday that crude stockpiles rose 1.3 million barrels last week. Government data due at 10:30 AM ET (1530 GMT) on Wednesday is expected to show a supply build of 2 million barrels, according to Investing.com forecasts.
--Reuters contributed to this report