Oil gained for a fourth session, the longest rising streak this year, amid signs that the worst impacts of the coronavirus outbreak may be easing.<\/p>\n
Chinese refiners have used oil\u2019s earlier drop to snap up cheap cargoes, taking many traders by surprise. That follows the World Health Organization\u2019s view that the sharp increase in the number of virus cases reported in China\u2019s Hubei province this week doesn\u2019t necessarily reflect a sudden jump in new infections.<\/p>\n
It\u2019s not just crude prices that have staged a recovery since falling to the lowest level in a year on Monday. The market\u2019s structure also rallied into a backwardation, indicating some of the oversupply may have eased.<\/p>\n
The three major oil-forecasting agencies have shown a wide divergence on how severely they expect the virus to affect energy consumption. The Organization of Petroleum Exporting Countries, the International Energy Agency and the U.S. Energy Information Administration have all cut their demand estimates, but the IEA\u2019s reduction is three times as big as the impact seen by OPEC.<\/p>\n
Yet as prices extend gains, analysts and traders are asking whether the biggest repercussions for oil demand may now already be known.<\/p>\n
\u201cThe physical buying spree by Chinese teapot refineries defies the current picture of a decline in Chinese oil demand,\u201d said Bjarne Schieldrop, chief commodities analyst at SEB. \u201cInstead, it aligns with the view that we have now seen the worst \u2014 the virus outbreak is now contained and under control.\u201d<\/p>\n
West Texas Intermediate crude for March delivery rose 73 cents to $52.15 a barrel on the New York Mercantile Exchange as of 11:17 a.m. London time. It\u2019s up 3.6% this week. Brent for April settlement gained 1.5% to $57.17 a barrel on the ICE Futures Europe exchange, and is 5% higher for the week.<\/p>\n
Prices have also neared buying points for high-frequency, systematic traders known as CTAs, or commodity trading advisers. Those levels were at $56.75 for Brent and $51.90 for WTI, according to Keith Wildie, senior commodities broker at R.J. O\u2019Brien.<\/p>\n
The IEA is the most bearish of the three forecasters. It\u2019s predicting an oil demand contraction of 435,000 barrels a day this quarter, which would be the first drop in a decade. That outlook is 1.3 million barrels a day lower than its own estimate a month ago, a downgrade three times as big as OPEC\u2019s. The EIA is in the middle.<\/p>\n","protected":false},"excerpt":{"rendered":"
Oil gained for a fourth session, the longest rising streak this year, amid signs that the worst impacts of the coronavirus outbreak may be easing. Chinese refiners have used oil\u2019s earlier drop to snap up cheap cargoes, taking many traders by surprise. That follows the World Health Organization\u2019s view that the sharp increase in the […]<\/p>\n","protected":false},"author":62,"featured_media":9898,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,15],"tags":[228,369],"class_list":["post-21529","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-all-news","category-economy","tag-oil-production","tag-opec"],"yoast_head":"\n