2020-02-05 11:30:00
OIL PRICE: ABOVE $54
REUTERS - Oil prices rose on Wednesday, boosted by news that OPEC and its producer allies are weighing further output cuts to counter a potential squeeze on global oil demand resulting from China's fast-spreading coronavirus.
Brent crude oil futures LCOc1 were up 31 cents, or 0.6%, to $54.27 a barrel by 0734 GMT, while U.S. West Texas Intermediate (WTI) crude futures CLc1 were up 21 cents or 0.4% to $49.82 a barrel. Both prices earlier rose more than 1%.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, a group known as OPEC+, weighed the impact on global oil demand, and economic growth, of the coronavirus outbreak at a meeting on Tuesday, hearing from China's envoy to the United Nations in Vienna.
Producers are weighing further output cuts and moving a planned policy meeting to February rather than March.
"Oil's sell-off is deep into oversold territory so we should not be surprised ... if we see prices rebound a few dollars," said Edward Moya, an analyst at broker OANDA.
But he warned the impact of production curbs might be canceled out if problems persist longer-term in China, the world's biggest crude oil importer and the main driver of global energy demand growth in recent years.
"This is a critical time for oil prices and even if we see OPEC+ deliver deeper production cuts, an extended shutdown of China will destroy demand for crude's top importer," Moya said.
Fears of a virus-related slump in global demand have flipped the oil market into contango this week - a structure in which longer-dated oil futures trade at a premium that encourages traders to keep crude in storage for more profitable resale in the future, potentially indicating months of surplus.
"At these prices, commodity producers will soon begin to cut back on production and investment," Moody's Analytics said in a note on Wednesday. "Given the economic damage caused (by the virus) prospects are poor that prices will recover soon."
In other news ConocoPhillips (COP.N) issued a muted annual outlook on Tuesday, expecting oil demand growth to be hit by 100,000-200,000 barrels per day this year due to the outbreak of the virus in China.
The company also said it was tapering down production in Libya and expects no output "fairly soon", following a force majeure between ConocoPhillips and the country's National Oil Corp (NOC).
Meanwhile, U.S. crude oil stocks rose by 4.2 million barrels in the week to Jan. 31 to 432.9 million barrels, data from industry group the American Petroleum Institute showed on Tuesday. That was well above analysts' expectations for a build of 2.8 million barrels.
The weekly report from the Energy Information Administration (EIA), an agency of the U.S. Department of Energy, is due later on Wednesday.
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Earlier:
2020, February, 3, 12:25:00
OIL PRICE: ABOVE $56
Brent crude was at $56.44 a barrel, down 18 cents, or 0.3%, WTI crude rose 10 cents to $51.66 a barrel,
2020, January, 31, 12:35:00
OIL PRICE: NEAR $59
Brent were 68 cents higher at $58.97 a barrel, WTI were up by 70 cents to $52.84 a barrel
2020, January, 29, 13:30:00
OIL PRICE: NEAR $60
Brent rose 66 cents, or 1.1%, to $60.17 a barrel. U.S. WTI was up 62 cents, or 1.2%, at $54.10 a barrel.
2020, January, 27, 15:00:00
OIL PRICE:NEAR $59
Brent fell by $1.79 a barrel, or 2.95%, to $58.90, WTI was down by $1.63, or 3%, at $52.55.
2020, January, 24, 13:45:00
OIL PRICE:NEAR $62
Brent were up 31 cents, or 0.5%, at $62.35 a barrel, WTI were up 27 cents, or 0.5% higher at $55.86 a barrel.
2020, January, 22, 12:55:00
OIL PRICE:NEAR $64
Brent was down 30 cents, or 0.5%, at $64.29 a barrel, WTI fell 33 cents, or 0.6%, to $58.05 a barrel
2020, January, 20, 12:05:00
OPEC'S OIL PRODUCTION DOWN 2 MBD
Recent statistics issued by the Organisation of the Petroleum Exporting Countries, OPEC, highlighted a decrease in its production by 6.3 percent or some 2 million barrels per day in 2019, compared to 2018.
