TOKYO- Oil futures rose for a second day on Thursday amid investor optimism over unconfirmed reports of possible advances in combating the coronavirus outbreak in China as a sign fuel demand may rebound in the world’s biggest oil importer.
Brent futures rose by 98 cents, or 1.8 percent, to $56.26 a barrel, having risen 2.4 percent in the last session. US West Texas Intermediate (WTI) futures gained $1.08, or 2.1 percent, to $51.83 a barrel after rising 2.3 percent on Wednesday.
A committee that advises the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, a group known as OPEC+, is set to meet for a fourth day on Thursday. They are discussing whether to reduce oil production further to support prices after a multi-day slump over concerns about economic growth and energy demand caused by the outbreak.
“Oil markets are rebounding from the 5-day slide as investors turn optimistic that OPEC+ officials will deliver an appropriate response to … the spread of the coronavirus,” said Stephen Innes, chief market strategist at AxiCorp.
The Joint Technical Committee for OPEC+ has been meeting this week to consider increasing output cuts by an additional 500,000 barrels per day or to extend current cuts beyond March. OPEC+ ministers are due to meet on March 5 and 6.
Oil prices have slumped more than 20 percent since reaching their highest this year on Jan. 8 on demand concerns caused by the virus outbreak and oversupply indications.
A technical market indicator known as the relative strength index, which measures buying and selling momentum, suggests that prices have fallen too far, too fast and investors may be buying futures in response. – Reuters
