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Oil prices rose for a second day on Wednesday, standing on firmer ground after a five-day fall on talk OPEC could extend oil cuts if a new coronavirus hurts demand, while data showing a decline in U.S. stockpiles helped steady prices.
Financial markets that have been hit by the spread of the virus and a growing death toll are taking stock of the economic fallout, helped by comments from the head of the World Health Organization supporting China’s efforts to beat the outbreak.
“Oil’s bloodbath appears to be over for now,” said Edward Moya, senior market analyst at OANDA.
“China’s coronavirus fears have somewhat eased and a 4.3 million barrel drop with the American Petroleum Institute data provided a boost for energy prices,” he added.
OPEC wants to extend oil production cuts until at least June from March, and may deepen the reductions should demand for oil in China be significantly reduced by the spread of the virus, OPEC sources said.
U.S. oil inventories fell last week, data from industry group the American Petroleum Institute showed on Tuesday, compared with analysts’ expectations of a gain of 482,000 barrels.