Oil maintains momentum as virus concerns may lead to deeper output cuts

SEOUL- Oil prices continued to advance for three consecutive days. Such upbeat activity followed after market sentiment boosted on expectations that primary oil manufacturers will implement deeper output reduction to recuperate from slump in demand brought by coronavirus contagion in China, the world’s second-biggest oil importer.

Brent crude LCOc1 added 17 cents, equivalent to 0.3%, to $55.96 a barrel at exactly 0217 GMT. US West Texas Intermediate (WTI) Clc1 acquired 29 cents, equivalent to 0.6%, standing at $51.46 per barrel.

The Organizations of Petroleum Exporting Countries and its associates commonly known as OPEC+ suggested deeper oil output reduction of 600,000 barrels per day. The reduction was urged to be executed from its 1.7 million cuts in order to recuperate from virus-related demand decline.

The OPEC leveled down its annual demand outlook by 200,000 bpd, eliciting expectations that the organization will implement the recommended cuts this February.

Russian government has yet to release a definite statement about the scheme, but majority of Russian-–based oil refineries agreed on extending the reduction to the second quarter, an insider at Lukoil disclosed on Wednesday.