U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher on Friday as investors continue to increase bets that OPEC and its allies will come through with the production cuts a technical committee recommended the week-ending February 7.
The price action also suggests that traders are a little more optimistic that the coronavirus outbreak has reached a peak and that the demand crisis may be ending. The markets are also on track for their first weekly gain since early January.
OPEC Cuts Forecast for Oil Demand Growth This Year
In a closely-watched report published Wednesday, OPEC cut its forecast for oil demand growth this year, saying the coronavirus outbreak was the primary reason.
The cartel said it now expects 2020 daily oil demand growth to be 990,000 barrels per day (bpd), which is 230,000 bpd below prior forecasts.
“The impact of the Coronavirus outbreak on China’s economy has added to the uncertainties surrounding global economic growth in 2020, and by extension global oil demand growth in 2020,” OPEC said in the report.
IEA Says Virus Outbreak to Shrink First-Quarter Oil Demand
Oil demand is set to fall year on year in the first quarter for the first time since the depths of the financial crisis in 2009 hurt by the coronavirus outbreak in China, the International Energy Agency (IEA) said on Thursday.
“The consequences of Covid-19 for global oil demand will…