Oil prices had been mixed Thursday as issues about falling demand caused by travel constraints tied to the coronavirus epidemic in China, the world’s greatest oil importer, outweighed expectations of supply reductions from major producers.
Brent crude plunged 6 cents, i.e., 0.1%, to $55.73 a barrel. U.S. West Texas Intermediate (WTI) was up 5 cents, i.e., 0.1%, to $51.22 a barrel.
Brent surged 3.2% Wednesday while WTI gained 2.5% as a slowdown in new Chinese coronavirus cases supported expectations of a demand restoration.
However, Hubei province, the epicenter of the epidemic, stated Thursday the number of new confirmed cases there soared by 14,840 on February 12 to 48,206, and deaths climbed by a daily record of 242 to 1,310, reflecting changes to the diagnostic methodology.
Oil demand in China, the world’s second-largest crude consumer, has plunged due to travel restrictions to and from the nation and quarantines within it.
Another Chinese oil refiner China National Chemical stated Thursday it could shut a 100,000 barrel-per-day refinery and cut processing at two other amid dropping fuel demand.
However, even with the rise in cases pressuring crude, “oil prices are seeing some relief from the progress that the Russians may finally sign off on the OPEC+ additional production reductions,” he stated.
OPEC+ recommended last week an additional production reduction of 600,000 barrels per day (BPD) to its current 1.7 million BPD reduction to offset the disease-associated demand losses.