- Brent crude recovers from 13-month low hit on Monday.
- U.S. crude inventories expected to rise in weekly reports.
- China’s top virus expert says outbreak may peak this month.
- OPEC+ considers cutting output by another 600,000 bpd.
Oil rose to $54 a barrel on Tuesday, recoveringÂ from a 13-month low as the number of new coronavirus cases slowed in China,Â easing some concerns about a lasting hit to oil demand.
The death toll climbed above 1,000 on Tuesday, while the number of newÂ confirmed cases fell.Â The epidemic may peak in February and thenÂ plateau before easing, the Chinese government’s top medical adviser on theÂ outbreak said.
Brent crudeÂ rose 82 cents to $54.09 a barrel by 1008 GMT. It fell toÂ $53.11 on Monday, the lowest since January 2019.Â
U.S. West Texas IntermediateÂ crude was up 72 cents at $50.29.Â
Investors remain wary that China’s oil demand could take a further hit ifÂ the coronavirus cannot be contained and if OPEC and its allies, known as OPEC+,Â fail to agree on further steps to support prices.
“Though oil is recovering again today, the lack of any coordinated action byÂ OPEC+ means that oversupply concerns are likely to retain the upper hand,” saidÂ Eugen Weinberg, analyst at Commerzbank.
The virus is already denting demand in the world’s second-largest oilÂ consumer. Chinese state refiners plan to cut as much as 940,000 barrels per dayÂ (bpd) – almost 1% of world demand – from their crude processing rates inÂ February.
Oil rose alongside a rally in world equities, which resumed their riseÂ towards record highs on Tuesday on hopes the virus is peaking. But some analystsÂ said concerns about the virus and oil demand would likely resurface.
The rally “seems to be more of a technical retracement than a general beliefÂ that the epidemic has run its course,” Tamas Varga of oil broker PVM said.Â
The Organization of the Petroleum Exporting Countries (OPEC) and alliesÂ including Russia are restraining output by 1.7 million bpd in 2020 to supportÂ the market, and have been weighing a further curb to stem fallout from theÂ virus.
An OPEC+ advisory panel proposed an additional cut of 600,000 bpd last week,Â but Russia has delayed delivering its official stance, frustrating some OPECÂ members.
In a development that could add downward pressure on prices, U.S. crudeÂ inventories are expected to rise for a third straight week, by 2.9 millionÂ barrels in the week ended on Feb. 7, a Reuters poll showed.
U.S. supply reports are due later on Tuesday and on Wednesday.Â