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Oil prices rebound from China virus slump amid ginger recovery across markets - Reuters

FILE PHOTO: Pump jacks operate in front of a drilling rig in an oil field in Midland, Texas U.S. August 22, 2018. Picture taken August 22, 2018. REUTERS/Nick Oxford/File Photo

SINGAPORE (Reuters) - Oil prices rose on Tuesday, matching moves in other financial markets as investors regained calm after Monday’s sharp sell-off on fears of the impact of the China coronavirus on demand for fuel sent crude to its lowest level in more than a year.

Brent crude was at $54.66 a barrel by 0227 GMT, up 21 cents, or nearly 0.4%, while U.S. West Texas Intermediate (WTI) crude was up 32 cents, or 0.6%, at $50.43 a barrel.

Both Brent and WTI are currently down by more than 20% from this year’s peak on Jan. 6.

“The rebound of crude oil prices reflects improved trading sentiment (across the Asia-Pacific region), as concerns over the coronavirus outbreak alleviated somewhat. The Asian equity market also recovered from yesterday’s losses,” said Margaret Yang, market analyst at CMC Markets.

She said recovery was also helped by the Organization of the Petroleum Exporting Countries (OPEC) and its allies considering further supply cuts amid concerns that the virus will dampen the outlook for global energy demand.

Three OPEC+ sources and an industry source familiar with discussions told Reuters on Monday OPEC and its allies including Russia, known as OPEC+, were considering cutting their oil output by a further 500,000 barrels per day (bpd) due to the impact on oil demand from the coronavirus.

“Some half-a-million barrels cut is expected but we won’t rule out an even deeper cut should the situation worsen,” said Yang. “This expectation boosted oil trading today.”

(This story was refiled to correct language, restore dropped words.)

Reporting by Seng Li Peng; Editing by Kenneth Maxwell

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