Oil climbed back above $50 a barrel as signs that Asia’s coronavirus may be easing spurred speculation that the worst of crude’s sell-off could have passed, Bloomberg reports.
U.S. futures climbed 1.4% in a second daily gain, having lost about 20% during the preceding month amid fears the disease would slash fuel consumption in China. The latest data from the country showed a drop in suspected infections on the mainland and the number of cases in the virus’s epicenter, Hubei province, at the lowest level this month.
“Risk sentiment is dominating the market and probably helping oil prices today,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “It seems the market thinks the worst is over, though time will tell.”
West Texas Intermediate crude for March delivery rose 72 cents to $50.66 a barrel on the New York Mercantile Exchange as of 9:57 a.m. London time. It advanced 0.8% on Tuesday after closing at a 13-month low the day before. Brent for April settlement climbed 1.9% to $55.06 a barrel on the ICE Futures Europe exchange in London.
Prices have also drawn some support from signals that OPEC and its partners may intervene to shore up the market.
Russian Energy Minister Alexander Novak is meeting with the nation’s oil companies after technical experts from OPEC+ proposed last week that the coalition cut production further. Russia is “studying” the recommendation that the 23-nation alliance reduces supplies by an additional 600,000 barrels a day, on top of cutbacks already in progress.
Saudi Arabia has been leading the push for more production curbs, while Russia, whose budget is more resilient to lower oil prices, is proceeding with caution.