UPDATE 9-Oil prices climb on prospects for deeper OPEC+ output cuts

* IEA sees first demand drop for 10 years in first quarter
* Brent six-month spread at minus 26 cents

(Updates to settlement)
By Devika Krishna Kumar
NEW YORK, Feb 13 (Reuters) - Oil prices edged higher on
Thursday as investors hoped the world's biggest producers would
cut output more while they largely shrugged off forecasts of
slumping demand due to the coronavirus outbreak in top oil
importer China.
Brent crude LCOc1 ended the session up 55 cents, or 1%, at
$56.34 a barrel while U.S. West Texas Intermediate (WTI) CLc1
settled up 25 cents, or 0.5%, at $51.42 a barrel.
The Organization of the Petroleum Exporting Countries
lowered its 2020 demand forecast for its crude by 200,000 bpd,
prompting expectations the producer group and its allies, known
as OPEC+, could cut output further.
"The Russians have pretty much signaled that everyone is on
board for OPEC+ delivering deeper production cuts," said Edward
Moya, senior market analyst at OANDA in New York. "Crude's price
action possibly suggests a firm bottom is in place. As long as
the coronavirus does not show strong signs that the spreading of
the virus is intensifying, WTI crude could make a run towards
the mid-$50s."
Oil demand in China, the world's second-largest crude
consumer, has plunged because of travel restrictions and
quarantines.
Hubei province, the center of the outbreak, said on Thursday
the number of new confirmed cases there jumped by 14,840 to
48,206 on Feb. 12 and that deaths climbed by a daily record of
242 to 1,310. Oil refiner China National Chemical Corp said it would close
a 100,000 bpd plant and cut processing at two others amid
falling fuel demand. The International Energy Agency (IEA) expects oil demand in
the first quarter to fall for the first time in 10 years before
picking up from the second quarter. The agency cut its full-year
global growth forecast to 825,000 bpd. IEA/S
"(It's) worth noting that these forecasters are for now
assuming a V-shape recovery in oil demand, with the bulk of the
impairment concentrated in Q1, 2020," BNP Paribas analyst Harry
Tchilinguirian told the Reuters Global Oil Forum.
Brent and WTI have fallen more than 20% from their January
peak because of the disease outbreak.
"All of the fundamentals are basically negative and even
equities are lower and crude oil on the other hand continues to
rip higher," said Bob Yawger, director of futures at Mizuho in
New York. "You can argue that maybe those demand numbers aren't
as bad as the market thought they could be."
Lower fuel demand expectations have shifted the market
structure for both Brent and WTI into a contango - where prompt
prices are lower than those for later dates.
The six-months spread of Brent futures contracts
LCOc1-LCoc7 settled at about minus 26 cents.

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Brent contango https://tmsnrt.rs/38orfML
Chinese, World Oil Demand Growth, y-o-y https://tmsnrt.rs/31N6jMY
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