UPDATE 7-Oil edges up as output cut hopes offset coronavirus concern

* Global oil demand could fall by 435,000 bpd in Q1 - IEA
* Russia may support further OPEC+ cuts on growing oil glut
* Weekly price rise could influence producers on cuts

(Updates prices)
By Laila Kearney and Noah Browning
NEW YORK/LONDON, Feb 17 (Reuters) - Oil prices inched up on
Monday as concerns over the economic fallout from the
coronavirus outbreak in China were offset by expectations that
potential production cuts from major producers could tighten
global crude supply.
Brent crude LCOc1 was at $57.59 a barrel, up 27 cents, by
12:55 p.m. EST (17:55 GMT) after rising 5.2% last week, its
biggest weekly gain since September 2019.
U.S. West Texas Intermediate crude CLc1 was up 23 cents to
$52.28 a barrel, after a 3.4% gain last week.
Trading volumes were thin due to the U.S. Presidents Day
holiday.
"Nothing goes down forever, as they say, and oil appears to
have finally shaken off its bearish malaise," said Stephen
Brennock of oil broker PVM.
"Virus anxieties were put on the back burner. Investors
cheered a salvo of stimulus measures from China's central bank
... sentiment was given a supportive jolt by expectations of a
supply response from the OPEC+ producer alliance."
The International Energy Agency (IEA) said last week the
virus was set to cause oil demand to fall by 435,000 barrels per
day (bpd) year-on-year in the first quarter, in what would be
the first quarterly drop since the financial crisis in 2009.
Oil rose last week for the first time since early January on
optimism that Chinese economic stimulus measures could lead to a
recovery in oil demand in the world's largest importing country.
There are some indications of prompt demand for oil as the
front-month Brent futures market has shifted to a backwardation,
when near-term prices are higher than later-dated prices, from a
contango.
Investors are also anticipating that the Organization of the
Petroleum Exporting Countries (OPEC) and its allies, including
Russia, will approve a proposal to deepen production cuts to
tighten global supplies and support prices.
The group, known as OPEC+, has an agreement to cut oil
output by 1.7 million bpd until the end of March.
A technical committee earlier this month recommended the
group reduce production by another 600,000 bpd because of the
impact of the coronavirus, though oil prices' first weekly gain
since early January on Friday may give the producers pause.
"The more recent strength that we have seen in the market
may also make OPEC+ complacent when it comes to taking action,"
ING said in a note.
"Already the group has failed to bring forward the meeting
that was originally scheduled for early March. And if the market
consolidates around current levels, OPEC+ may see little need to
rush a decision."