Oil rises as OPEC+ moves closer toward deeper output cut

* OPEC+ panel recommends additional 1 million bpd output
cuts
* OPEC and allies to meet March 5-6 to discuss output cuts

By Shu Zhang
SINGAPORE, March 4 (Reuters) - Oil prices rose more than 1%
on Wednesday on expectations that major producers have moved
closer to an agreement to enact deeper output cuts aimed at
offsetting the slump in demand caused by the coronavirus
outbreak.
Brent crude LCOc1 rose by 58 cents, or 1.12%, to $52.44 a
barrel at 0212 GMT, after settling down 4 cents in the previous
session. U.S. West Texas Intermediate (WTI) futures CLc1 rose
by 53 cents, or 1.12%, to $47.71 a barrel, up for a third
session.
Brent and WTI have each fallen about 27% their 2020-peak
reached in January because of the declining demand from the
coronavirus outbreak.
A panel of the Organization of Petroleum Exporting Countries
(OPEC) and its allies, a group known as OPEC+, recommended
cutting oil output by an extra 1 million barrels per day (bpd)
on Tuesday. The recommendation may mean that Russia and Saudi
Arabia, the two biggest producers in the OPEC+ group, are close
to a deal to support prices. That would be in addition to 2.1 million bpd in current
output cuts that include a 1.7 million bpd in curbs by OPEC+ and
other voluntary reductions by Saudi Arabia, the world's biggest
exporter.
OPEC+ had initially been considering an additional cut of
600,000 bpd to offset the coronavirus-related slump in demand.
The group is set to meet in Vienna on March 5-6 though with
other international conferences being cancelled because of the
virus the talks may be held by video.
Uncertainty over the extent of demand erosion arising from
the virus outbreak and the unclear timing of a recovery in
Libyan output would influence the OPEC+ decision, Barclays
analysts said in a research note.
"This is no time for caution for OPEC+. Second-quarter
oversupply needed some heavy lifting from the group to offset
even before the COVID-19 outbreak, but now it is a must," the
analysts said. It expects OPEC+ will deepen the cuts for the
second quarter by at least 500,000 bpd.
Morgan Stanley on Tuesday cut its second-quarter 2020 Brent
price forecast to $55 per barrel and its WTI outlook to $50 on
expectations that China's 2020 oil demand growth would be close
to zero and demand outside China may slow further because of the
virus.