Crude oil prices remain on the defensive on Thursday, with the selling pressure has intensified following a break below the $60 psychological handle at the start of the week. Brent made some bullish attempts yesterday but was rejected from the $59.80 region and is now back below $58. 

The market continues to digest the risks from a spreading of a new China coronavirus. Later today, the World Health Organization’s Emergency Committee will hold the second meeting to make decision on the status of the threat. Should the committee call the spread a is global emergency, a new wave of risk aversion may send oil prices even lower from the current levels. 

In these circumstances, the market needs a more pronounced support from OPEC. Traders now discuss the possibility of an earlier cartel meeting scheduled for March. Should the producers decide to move up the gathering to February, it will bring some relief to commodities, as market participants hope the organization members will extend the current output cut agreement and make deeper cuts to support the struggling market amid the potential effect from a spread of the coronavirus. So, any positive signals from this front may cap the persistent downside pressure on oil futures these days. 

Of note, the sentiment in the market deteriorated following the U.S. Energy Information Administration report which showed that crude oil stockpiles increased by 3.5 million barrels last week versus +1.4 million expected and a plunge by 4.3 million barrels reported by API a day earlier. Moreover, gasoline stockpiles climbed by 1.2 million barrels, to another record high. 

From the technical point of view, Brent crude is challenging early-October lows around $57.70, and a break below this area could send the futures to the next support around $57.40 should risk sentiment remain negative in the near term. on the upside, the key resistance lies at $60, and the possibility of a robust recovery above this level is very low at the moment. It looks like the barrel will suffer additional losses before it finds a bottom and stages a reversal from multi-month lows. 


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