Oil advances after Russia supports supply reduction on virus contagion

Oil prices soared on Friday after Russia sided with a recommendation for OPEC and other oil associates to further reduce oil outputs amid dwindling demand for crude as China struggles to combat coronavirus that has impacted global markets.

Brent crude futures increased 34 cents, equivalent to 0.6%, to $55.27 per barrel at exactly 0250 GMT. Though trading firmly, the crude is about to hit its fifth week of decline.

U.S. West Texas Intermediate (WTI) crude CLc1 futures advanced 28 cents, equivalent to 0.5%, at $51.23per barrel, with its performance anticipated to hit fifth week of low.

OPEC was advised to reduce oil outputs by 600,000 per day.

“We support this idea,” said Sergei Lavrov, Russia’s Foreign Minister, when asked about the scheme at a media conference in Mexico City.

“While there is no firm view on the outbreak’s impact on oil demand, OPEC is most likely focused on the status-quo short-term crisis rather than a prolonged one,” Eurasia group said, estimating a Chinese demand contraction of over 3 million barrels per day during the first cut of 2019.

Oil prices have sunk down to its deepest for more than five weeks since the contagion of virus which originated from Wuhan City in China.