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Oil climbs after Russia backs possible output cuts to counter coronavirus impact on demand

Published 02/07/2020, 09:24 AM
Updated 02/07/2020, 09:32 AM
© Reuters. Oil climbs after Russia backs possible output cuts to counter coronavirus impact on demand
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TOKYO, Feb 7 (Reuters) - Oil prices rose on Friday after
Russia said it backs a recommendation for the OPEC and its
producer allies to deepen output cuts amid contracting demand
for crude as China battles the coronavirus epidemic that has hit
global markets.
Brent crude LCOc1 futures rose 32 cents, or 0.6%, to
$55.25 a barrel by 0104, after falling 0.6% on Thursday. U.S.
West Texas Intermediate (WTI) crude CLc1 futures were up 26
cents, or 0.5%, at $51.21 a barrel, having gained 0.4& the
previous session.
A panel advising the Organization of Petroleum Exporting
Countries (OPEC) and allies led by Russia, known as the OPEC+
group, suggested provisionally cutting output by 600,000 barrels
per day (bpd), three sources told Reuters on Thursday.
"We support this idea," said Sergei Lavrov, Russia's Foreign
Minister, when asked about the proposal at a news conference in
Mexico City later in the day. Oil prices have fallen by more than a fifth since the
outbreak of the virus in the city of Wuhan in China.
Chinese President Xi Jinping declared a "people's war" on
the epidemic as China's Hubei province, where Wuhan is located,
reported 69 new deaths, taking the total in the country to more
than 600. "The impact of the coronavirus on the oil market remains
largely a Chinese demand story with weakening jet fuel demand
and economic run cuts, but demand destruction outside of China
has been minimal, for now," RBC Capital Markets analysts said in
a note.

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