(Corrects to show JTC meeting for third day, not fourth,
paragraph 3)
By Aaron Sheldrick
TOKYO, Feb 6 (Reuters) - Oil futures rose for a second day
on Thursday amid investor optimism over unconfirmed reports of
possible advances in combating the coronavirus outbreak in China
which could cause fuel demand to rebound in the world's biggest
oil importer.
Brent futures rose by 77 cents, or 1.4%, to $56.05 a barrel
by 0735 GMT, having risen 2.4% in the last session. U.S. West
Texas Intermediate (WTI) futures gained 95 cents, or 1.9%, to
$51.70 a barrel after rising 2.3% on Wednesday.
A committee that advises the Organization of the Petroleum
Exporting Countries (OPEC) and allied producers, a group known
as OPEC+, is set to meet for a third day on Thursday. They are
discussing whether to reduce oil production further to support
prices after a multi-day slump over concerns about economic
growth and energy demand caused by the outbreak. "Given the pressure we have seen the oil market under
recently, it does seem that a relief rally was long overdue,"
ING Economics said in a note.
The Joint Technical Committee for OPEC+ has been meeting
this week to consider increasing output cuts by an additional
500,000 barrels per day or to extend current cuts beyond March.
OPEC+ ministers are due to meet on March 5 and 6.
Oil prices have slumped more than 20% since reaching their
highest this year on Jan. 8 on demand concerns caused by the
virus outbreak and oversupply indications.
A technical market indicator known as the relative strength
index, which measures buying and selling momentum, suggests that
prices have fallen too far, too fast and investors may be buying
futures in response.
In the last two days, commodities, equities and other
markets have been buoyed by unconfirmed reports of a possible
advance in producing treatment drugs for the coronavirus that
has shut down transport and limited industrial activity in
China.
However, the World Health Organization has played down the
reports of "breakthrough" drugs being discovered. MKTS/GLOB
A further 73 people on the Chinese mainland died on
Wednesday from the virus, the highest daily increase since the
outbreak started, and another 3,694 new cases were reported,
raising the total to 28,018. Commodity supply chains in China have been disrupted to the
extent that short-term sales of crude oil, along with liquefied
natural gas, fell to nearly zero this week. While oil prices have gained in the past two days, the front
month contracts of both Brent and WTI remain in contango
LCOc1-LCOc2 , a situation where longer-dated futures trade at a
premium to shorter dated ones, a sign that the market sees ample
supply or falling demand for crude. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
CHART: U.S. oil may rise into $52.65-$63.47 range
Brent oil may retest resistance at $56.58
crude oil mkt flips to contango as coronavirus spread
strangles China's oil demand https://tmsnrt.rs/2uemy9B
Change in Brent crude oil prices since Jan 20, 2020 https://tmsnrt.rs/31sQsTs
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>