Oil prices rose for a second day on Wednesday, recouping some losses after a five-day rout on talk that OPEC could extend oil output cuts if a replacement coronavirus hurts demand, while data showing a decline in U.S. stockpiles helped steady prices.
Brent crude rose 66 cents, or 1.1%, to $60.17 a barrel by 0951 GMT. U.S. crude was up 62 cents, or 1.2%, at $54.10 a barrel.
Financial markets that are hit by the spread of the virus out of China try to assess the economic fallout, with the price rising to 132 and airlines reducing flights to China.
“While the coronavirus continues to the spread both in and out of doors China the market is trying to regulate positions across all asset classes,” said Saxo Bank analyst Ole Hansen.
“Commodities, most of which depend upon global growth and demand, are caught within the crosshairs of those developments … China (is) the world’s biggest buyer of most commodities, from petroleum and fuel to copper and ore .”
British Airways suspended all direct flights to and from China after Britain warned against about essential visit the country, and jet fuel demand has slumped in Asia as airlines have cancelled connections.
The Organization of Petroleum Exporting Countries wants to increase boring cuts until a minimum of June from March, and should deepen the reductions, should demand for oil in China be significantly reduced by the spread of the virus, OPEC sources said.
OPEC and its allies including Russia, are trying to stabilise prices amid questions over the worldwide demand outlook and rising supplies, particularly out of the us .
“A further extension may be a strong possibility and a deeper cut may be a possibility,” one OPEC source told Reuters. Any fallout of the China virus on oil demand is probably going to be clearer over the approaching week, the source said.
In the us , petroleum inventories fell by 4.3 million barrels last week, data from industry group the American Petroleum Institute showed on Tuesday, compared with analysts’ expectations of a gain of 482,000 barrels.
Gasoline stocks were up by 3.3 million barrels, compared with forecasts during a Reuters poll of a 1.3 million-barrel gain.
Distillate fuel inventories, which include diesel and fuel oil , fell by 141,000 barrels, against expectations of a 1 million barrel drop.
Official figures on oil and products are due out from the Energy Information Administration afterward Wednesday.
The world’s biggest oil and gas companies
- Largest oil and gas companies in the world: Ranking the ten biggest by revenues.
- Phillips 66 – $111.46bn.
- Lukoil – $115.2bn.
- Chevron – $158.9bn.
- Total – $209.36bn.
- ExxonMobil – $290.2bn.
- BP Plc – $298.75bn.
- China National Petroleum Corp (CNPC) – $346bn.