The fast spreading epidemic beyond China triggered a slump in oil quotes.

Citing Robbie Fraser, a senior commodity analyst at Schneider Electric, bearish sentiment is still setting the tone for the oil market. So, market sentiment has been dented by the outbreak of the coronavirus termed COVID-19 that overshadows all other factors under the current conditions, the expert noted in his daily market analysis. Recently, the virus has spilled over outside China. Some countries with key oil processing facilities have reported confirmed cases. Among such countries are Oman and Iran.

US State Secretary Mike Pompeo said in a press conference that Washington is deeply concerned that Tehran could have hidden important details on the outbreak inside the country. According to the official estimates, the death toll in Iran includes at least 15 cases, though unofficial reports reveal a bigger number of death cases and hundreds of new virus cases.

Meanwhile, oil prices have been weighed down by fears that the coronavirus could dampen demand for fuel in China, the top oil consumer in the world. Since early January, the oil market has been trading mainly in the red.

Futures for West Texas Intermediate deliveries in April shed 39 cents or 0.8% to trade at $51.04 a barrel on the New York Mercantile Exchange. At the same time, the Brent crude international grade lost 43 cents or 0.8% and settled down at $56.87 a barrel.

Investors are shifting focus away from risky assets, including equities. Market participants are flocking to traditional safe havens such as Gold GCJ20, -1.19% and US Treasuries TMUBMUSD10Y -3,40%. Demand for safe haven assets remains buoyant amid the fast-spreading coronavirus inside and outside China. The new pneumonia-like deadly virus was first diagnosed in the city of Wuhan, China in late December 2019.

Investors are on edge, evaluating the epidemic fallout on the global economy. Indeed, recent macroeconomic data from the eurozone and China proved some weakness at the beginning of 2020. Another culprit for oil quotes is the open question whether OPEC and its allies will be able to agree on extra oil production cuts on the back of tensions between Saudi Arabia and Russia.

The cartel and its allies known as OPEC+ are due to meet at the end of the next week. The agenda is devoted to the discussion on oil demand and output rates.

The American Petroleum Institute released a weekly update on domestic oil inventories on Tuesday. The Energy Information Administration is due to provide official data on Wednesday.

According to the poll by S & P Global, the EIA could report that the US oil stocks expanded by 2.8 million barrels in the week ended on February 21. Gas inventories are expected to decline by 1.9 million barrels. Besides, distillate stocks are expected to contract by 900,000 barrels.