Oil rose for a second day on optimism OPEC+ will agree on deeper cuts in response to virus-led demand destruction, countering a further increase in U.S. crude stockpiles.
While Saudi Arabia and Russia remain split over the threat the outbreak poses to global demand, talks between experts from OPEC and its allies have been extended into a third day as they seek to determine the impact on consumption. Speculation of a potential resolution helped to offset a larger-than-expected increase in American inventories.
Oil is still down more than 18% since early January as the spread of the deadly virus curtails travel and fuel consumption, upending trade flows worldwide. BP (LON:BP) Plc expects the crisis to wipe out one-third of global oil demand growth in 2020.
“Investors are turning optimistic that OPEC+ will deliver an appropriate response to alleviate concerns stemming from the spread of the virus,” said Stephen Innes, chief market strategist at AxiCorp. Still, prices are likely to resume declines due to the hit to Chinese consumption, he added.