The prospects for a deeper production cut by OPEC+ pushed oil prices higher on Thursday. Investors were hoping major producers would curb their supplies further to compensate for the weakening demand in China due to the novel coronavirus outbreak.
OPEC cut its 2020 demand for its crude by 200,000 bpd, sparking expectations that the cartel and its allies would deepen their production curbs. Oil demand has weakened in China due to travel restrictions amid the coronavirus outbreak, with refineries cutting their run rates.
International benchmark Brent crude LCOc1 was up 55 cents (1%) to $56.34/barrel, while US WTI CLc1 gained 25 cents (0.5%) to $51.42/barrel. Both prices have fallen by more than 20% from their peak last month due to the outbreak.
The International Energy Agency (IEA) expects the oil market to see the first demand decline in a decade this quarter before picking up from the second quarter. The IEA revised down its 2020 global oil demand growth forecast to 825,000 bpd.