Oil jumps as WHO declares emergency but recommends no travel, trade restrictions

By Roslan Khasawneh
SINGAPORE, Jan 31 (Reuters) - Oil prices jumped on Friday
following sharp losses this week, as the World Health
Organization (WHO) came out against travel and trade
restrictions in declaring a global emergency over the spread of
the coronavirus that originated in China last year.
Oil prices had fallen nearly 4% through Thursday this week -
hitting three-months lows - before rebounding on Friday, with
investors and traders worried over how the spreading virus would
impact demand for oil and its products.
"The WHO declared a global health emergency but more
importantly said travel and trade restrictions were not
necessary," said Edward Moya, senior market analyst at OANDA in
New York.
Brent crude futures LCOc1 jumped 90 cents to $59.19 a
barrel by 0243 GMT, after falling 2.5% the previous session.
Brent is still down 2.5% for the week.
U.S. West Texas Intermediate (WTI) futures CLc1 were up by
$1.03 to $53.17 a barrel. The contract fell 2.2% on Thursday and
is now 1.9% lower for the week.
The WHO on Thursday declared that the coronavirus outbreak
in China - which has killed more than 200 people there and has
spread to some 18 countries - now constitutes a public health
emergency of international concern.
Despite the WHO announcement and the rebound in prices on
Friday, analysts remained cautious and warned of further
downside risks if the virus continues to spread.
"Oil's January correction, a 13% drop to be exact, was ripe
for a bounce," said Moya.
"Oil is likely to remain vulnerable here despite today's
optimism that the coronavirus has likely been contained."
Italy's government decided to close all air traffic between
Italy and China, and airlines including Air France, American
Airlines and British Airways have stopped flying to Chinese
cities.
"We calculate that demand could be hit by 500,000 barrels
per day as China curbs outbound tourism, and international
carriers halt flights," said ANZ Bank in a note on Friday.
Prices were also buoyed by reports that Saudi Arabia has
opened a discussion about moving an upcoming output policy
meeting to early February from March following the recent slide
in oil prices.