The bigger than expected build in USA crude oil inventories last week also kept pressure on prices.
Crude prices have suffered since the virus outbreak as worries about its impact on China's economic growth have taken hold.
Brent crude oil, the worldwide benchmark, fell 3.5 percent to $54.65 a barrel while West Texas Intermediate crude oil, the US benchmark, slid 2.6 percent to $50.25 a barrel. It could force the hand of OPEC and its allies, which are considering an emergency meeting to cut production and staunch the decline in prices, which are headed for the lowest close in four months.
Crude oil continues to head lower.
As the outbreak hits fuel demand in China, the world's biggest crude oil importer, refiner Sinopec Corp 0386.HK told its facilities to cut throughput this month by about 600,000 barrels per day (bpd), or 12%, the steepest cut in more than a decade.
The U.S.' crude oil inventories are estimated to decline by 4.27 million barrels for the week ending January 24, according to American Petroleum Institute (API) estimates on Tuesday.
As the virus has spread, the oil price has slumped in both London and NY, collapsing by more than 20pc since a Jan 8 spike which had been triggered by tensions between Iran and the United States.
Coronavirus outbreak: Toll rises to 361, over 17,000 infected; Chinese markets plummet
The pathogen also affected Chinese stock markets as it slumped nearly 9 per cent on reopening on Monday amid the virus outbreak. The victim was a 44-year-old Chinese male from the city of Wuhan who arrived in the Philippines via Hong Kong on January 21.
Brent crude futures LCOc1 were 68 cents higher at $58.97 a barrel by 0738 GMT, after falling 2.5% in the previous session.
The Organization of the Petroleum Exporting Countries and allies including Russian Federation, known as OPEC+, are considering holding a ministerial meeting on February 14-15, one of the OPEC sources said, earlier than a current schedule for a meeting in March.
Many companies planned to return to work on Friday after a week-long celebration of China's Lunar New Year holiday, but authorities have ordered businesses in many areas to stay shut longer to contain the disease.
A Reuters poll on Friday showed that oil prices will remain supported near current levels this year as political risks and OPEC-led output curbs help offset growing supply.
The OPEC+ group is considering deepening the cuts it made in December by another 500,000 barrels per day, according to Reuters.
JPM's oil strategists indicated that China's oil demand growth slipped by 400 kbd between 1Q03 and 2Q03 during the height of SARS crisis, with the rest of Asia also seeing weaker demand growth, which was partially responsible for a $5/bbl shock to oil prices on a quarterly basis.
There's talk of OPEC revising its March meeting date, but so far there's been no official word.