Oil gains 1% as short-sellers take profit; investors still wary over coronavirus

SINGAPORE, Feb 11 (Reuters) - Oil prices rose more than 1%
on Tuesday as recent sharp falls have encouraged investors
holding short positions to book profits, but the market remains
jittery over the Wuhan virus, which has now killed more than
1,000 in China.
Brent crude LCOc1 rose 79 cents, or nearly 1.5%, to $54.06
a barrel by 0216 GMT, while U.S. West Texas Intermediate CLc1
was up 63 cents, or about 1.3%, to $50.20.
"I know volumes are very weak today ... I also would like to
point out that we are in a technical support level and that
might be encouraging those who are short to take profits,"
Michael McCarthy, chief market strategist at CMC Markets, told
Reuters over the phone.
The number of coronavirus deaths on the mainland have now
reached 1,016, China's National Health Commission said, and the
number of cases have topped 42,600. virus has also spread to two dozen other countries, with
the head of the World Health Organization (WHO) cautioning on
Monday that the cases outside of China could be "the spark that
becomes a bigger fire".
While the virus outbreak is hurting China's economy - and
others affected such as Japan and Singapore - San Francisco
Federal Reserve Bank President Mary Daly, said the coronavirus
impact on the U.S. economy has been limited.
Worries about the virus's impact on oil demand, however, and
rising U.S. oil supplies will likely cap price gains.
U.S. crude oil inventories were estimated to have risen by
2.9 million barrels in the week to Feb. 7, a preliminary Reuters
poll showed on Monday, which would make it the third week in a
row where stock levels have increased. Oil supplies out of Brazil have also been growing, with
Petrobras PETR4.SA having hit a new production record in the
last quarter of 2019 at more than 3 million barrels of oil
equivalent per day.