- Brent crude rose $1.40 per barrel, or 2.7%, to $53.30 per barrel
- U.S. WTI crude rose $1.48 cents, or 3.2%,Â to $48.23 a barrel.
Oil prices extended gains on Tuesday onÂ expectations that central banks are likely to enact financial stimulus to offsetÂ the impacts of the coronavirus outbreak and growing optimism that OPEC willÂ order deeper output cuts this week.
Both futures contracts rose by more than 3% earlier in the session.
Brent and WTI have rebounded somewhat over the past two days from a moreÂ than 20% drop from their January 2020 peak on signs the spread of theÂ coronavirus had dented fuel demand.
“It is challenging to describe the month as anything other than quite theÂ roller coaster,” said RBC commodity strategist Christopher Louney.
“Yet a humbled rally and ongoing demand concerns for energy do not lookÂ particularly promising for flows for the time being.”
G7 finance ministers will also discuss this week how best to cushion theÂ impact of the outbreak on economic growth, French Finance Minister Le Maire saidÂ on Monday. That is occurring as other major central banks have promised monetaryÂ and fiscal stimulus.
The coronavirus, which originated in China, has spread to more than 60Â countries and has killed more 3,000 people globally.
With lingering worries over oil demand amid the virus outbreak, several keyÂ members of the Organization of the Petroleum Exporting Countries (OPEC) areÂ mulling a bigger oil output cut of possibly 1 million barrels per day (bpd). TheÂ previous proposal was for an additional reduction of 600,000 bpd.
OPEC and its allies, a group known as OPEC+, are expected to announce deeperÂ output cuts at their meeting on March 5-6 in Vienna. The group had agreed to cutÂ output by 1.7 million bpd in a deal that runs to the end of March.Â
Leonid Fedun, vice-president of Russia’s second-biggest oil producer Lukoil, said OPEC’s proposal to cut oil production by up to 1 million barrelsÂ per day would be enough to balance the market and lift oil prices back to $60 aÂ barrel. Fedun’s comments suggest Russia may be willing to agree to OPEC’sÂ proposals for fresh cuts to output.
Oil stockpiles in the United States, the world’s biggest crude producer andÂ consumer, are expected to rise for a sixth week by 3.3 million barrels, whileÂ refined product inventories are forecast to fall, according to Reuters poll.