SEOUL, March 3 (Reuters) - Oil prices rose for a second day
on Tuesday on expectations that central banks are likely to
enact financial stimulus to offset the impacts of the
coronavirus outbreak and growing optimism that OPEC will order
deeper output cuts this week.
Brent crude LCOc1 rose $1.48 per barrel, or 2.5%, to
$53.18 per barrel at 0148 GMT. U.S. West Texas Intermediate
(WTI) CLc1 rose $1.33, or 2.8%, to $48.07 a barrel.
Brent and WTI have rebounded somewhat over the past two days
from a more than 20% drop from their 2020 peak in January that
was caused by signs the coronavirus spread has dented fuel
demand.
Since Friday, WTI has gained 7.9% while the front-month
Brent contract has climbed 7.5%, the biggest two-day percentage
gains for both contracts since prices snapped back after the
missile attacks on Saudi Arabian oil facilities in September
2019.
The Organization of the Petroleum Exporting Countries (OPEC)
and its allies, a group known as OPEC+, are expected to announce
deeper output cuts at their meeting on March 5-6 in Vienna.
G7 finance ministers will also discuss this week how to best
to cushion the impact of the outbreak on economic growth, French
Finance Minister Le Maire said on Monday. That is occurring as
other major central banks have promised monetary and fiscal
stimulus.
The coronavirus, which originated in China, has spread to
more than 60 countries and has killed over 3,000 people
globally.
"Oil prices got their groove back after the world's largest
economies signalled they will be united in fighting off the
economic impact of the coronavirus and on the Russian
capitulation in agreeing to deliver deeper production cuts at
this week's meeting," said Edward Moya, senior market analyst at
OANDA.
"The coronavirus is still spreading globally and until
markets can possibly calculate a return of normal travel and
trade, oil will struggle."
With lingering worries over oil demand amid the virus
outbreak, several key members of OPEC are mulling a bigger oil
output cut. The previous proposal was for an additional
reduction of 600,000 barrels per day (bpd).
OPEC+ has agreed to current cuts of roughly 1.7 million bpd.
Russia's energy minister Alexander Novak said on Monday that
the country is evaluating an earlier and smaller oil production
cut proposal made by OPEC and its allies.