Oil Prices Recover Partially but Sentiment Remains Bearish
Oil prices recovered mid-week despite data published by the U.S. Energy Information Administration (EIA) on Wednesday showing that U.S. crude stockpiles had risen for a third consecutive week, even while gasoline and distillate inventories fell. WTI oil futures have recovered to US$51 – $51.50 per barrel from below US$50 at the beginning of the week, while Brent was trading at just over US$56 per barrel having dropped as low as US$53.11 on Monday. The impact of the spread of the Coronavirus continues to pose a significant downside risk to prices, as Chinese officials reported on Thursday morning that the number confirmed cases in Hubei Province, the center of the outbreak, had jumped to nearly 50,000, taking the total number of cases to 60,000, with the death toll now approaching 1,400 lives. Market sentiment remains bearish as uncertainty continues to prevail regarding Russia’s cooperation with OPEC to deepen proposed production cuts in response to weak demand projections due to the impact of the virus on Chinese and global demand.