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Another day, another drop in crude oil prices. Indeed, prices of the barrel of WTI have accelerated the recent breakdown of the $50.00 mark and dropped to fresh 2020 lows in the $48.80 region.

WTI weaker on coronavirus, looks to data

Prices of the West Texas Intermediate tumbled further and recorded fresh 14-month lows in sub-$49.00 levels on Wednesday in response to increasing panic over the impact of the Chinese COVID-19 on the demand for crude oil, and, in general, to the global growth prospects.

In fact, crude prices eroded initial gains after hopes of deeper oil output cuts by the OPEC+ were offset by developments from the fast-spreading coronavirus, as more cases were reported outside China.

It is worth mentioning that the cartel will meet on March 5-6 in Vienna, with an extension of the current agreement to curtail production and the probability of implement deeper cuts on top of the agenda.

In addition, the API reported late on Tuesday another weekly build in US crude oil supplies, this time by around 1.3M barrels. Later on Wednesday, it will be the EIA’s turn to publish its official weekly report on crude stockpiles.

What to look for around WTI

In the very near term, jitters surrounding the fast-spreading COVID-19 are expected to keep weighing on prices along with persistent worries over the excess of supply of the markets. On the supportive side – albeit relegated by the current coronavirus developments – emerges the situation in Libya, which not only remains unsolved, but it is also worsening by the day.

WTI significant levels

At the moment the barrel of WTI is losing 1.62% at $49.02 and a breach of $48.81 (2020 low Feb.26) would aim for $42.20 (2018 low Dec.24) and finally $41.83 (2017 low Jun.21). On the other hand, the next resistance of note emerges at $51.38 (21-day SMA) seconded by $54.40 (monthly high Feb.20) and then $56.16 (200-day SMA).