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Oil prices bounced Friday, but remained on track for hefty weekly and monthly declines as traders assess the spread of China’s coronavirus and its potential impact on global economic growth and demand for crude.
West Texas Intermediate crude for March delivery CLH20, +0.63% rose 46 cents, or 0.9%, to $52.60 a barrel on the New York Mercantile Exchange, while April Brent crude BRNJ20, +0.40% was up 23 cents, or 0.4%, at $57.56 a barrel.
WTI, the U.S. benchmark, was headed for a 2.8% weekly fall, which would put it on track for a 13.8% January decline, which would be its largest since a 16.3% May decline. Brent, the global benchmark, is down 5.1% for the week, on track for a 12.8% January fall.
Oil was buoyed in part by reports Saudi Arabia was talking with fellow members of the Organization of the Petroleum Exporting Countries and its allies about moving up an upcoming policy meeting from March to early February. Previous reports said OPEC members, rattled by the price slide, were weighing talks to further reduce output or extend production curbs currently scheduled to run through March.
But some analysts argued that moving the meeting could backfire.
“We do not believe it would be constructive to bring the ‘OPEC+’ meeting forward: it could be interpreted by the market as a panic response and thereby have the opposite effect,” said Carsten Fritsch, analyst at Commerzbank, in a note.
“What is more, it is not possible at present to predict the extent to which the coronavirus will ultimately dampen demand,” he said. “Estimates range from a few hundred thousand to 1 million barrels per day in the current quarter. Output can also be adjusted at short notice without the need for a meeting beforehand.”
The U.K. Department of Health and Social Care on Friday confirmed the country’s first two cases of coronavirus, both from the same family.
Global equity markets were under pressure Friday, but U.S. stocks had rebound on Thursday afternoon after the World Health Organization declared the outbreak a global emergency, with analysts tying the bounce to relief over the lack of a recommendation by the body to restrict travel to or trade with China. Beijing has reported nearly 9,700 cases of coronavirus, while the death toll has climbed to 213. The U.S. State Department on Friday urged Americans not to travel to China.
In other energy trading, March gasoline RBH20, +1.13% rose 1.2% to $1.5241 a gallon, while March heating oil HOH20, +0.96% was up 1% to $1.6589 a gallon.
March natural-gas futures NGH20, +0.16% were up 0.2% at $1.833 per million British thermal units.
