WTI trades deep in the negative territory near $47

• Coronavirus fears weigh heavily on crude oil prices on Monday.
• Russia will reportedly advocate for a 500K bpd increase in output.
• US Treasury Secretary says direct checks will go out to Americans next week.

Crude oil prices posted significant gains for the seventh consecutive time last week and the barrel of West Texas Intermediate (WTI) touched its highest level since late February at $49.26.

WTI erases last week's gains in a single day

However, the intense flight to safety amid renewed coronavirus fears triggered a deep selloff in oil and the WTI dropped all the way to $46.23 before recovering modestly. As of writing, the WTI was down 4.2% on the day at $47.

The new string of coronavirus in the UK forced major European economies to shut their borders and many countries announced travel restrictions, reviving concerns over an unsteady recovery in global energy demand.

Meanwhile, several news outlets reported that Russia is favouring a 500,000 barrels per day increase in OPEC+ crude oil production when the group reassesses the output strategy in February. This development made it difficult for the WTI to stage a convincing rebound.

On a positive note, US lawmakers reached a deal on the $900 billion worth coronavirus relief bill and US Treasury Secretary Steven Mnuchin announced that direct checks to Americans will be sent out as early as next week. With the holiday season approaching, oil consumption in the US could increase in the coming weeks.

Technical levels to watch for