WTI crude oil has had a bearish start to a new week over mounting worries about the potential economic fallout of the coronavirus pandemic after the Fed announced its second emergency rate cut this month. At the time of writing, WTI crude oil is trading at around $31.21 per barrel.

Over the weekend, the Federal Reserve cut interest rates down to near zero to offset any possible harm to the US economy from the spread of the coronavirus worldwide and across the US. WTI crude oil prices weakened as a result of this news, completely ignoring President Donald Trump’s assurances to fill up US’s strategic oil reserves, a move that would increase the demand for oil.

In addition to the second rate cut, the Fed has also committed to increase its balance sheet by around $700 billion over the next few weeks to provide some support to the US economy. These moves have heightened worries that the global economy may be impacted severely because of the coronavirus pandemic, and any resulting slowdown is likely to further weaken the demand for crude oil.

Crude oil prices have been driven lower over the past few weeks over the dominating risk-off sentiment in markets as a result of the coronavirus. Meanwhile, oil markets experienced a sharp crash after Saudi Arabia announced that it would increase crude production even as demand remains weak as it enters into a price war with Russia.