SEOUL- Oil prices advanced continuing its Tuesday’s well-ended performance on Wednesday. Such upbeat activity was mainly from signals that coronavirus cases are decelerating in China, relieving investors from demand concerns brought by the virus which originated from world’s second-largest oil importer.
Brent crude LCOc1 increased by 73 cents, equivalent to 1.3%, standing at $54.75 a barrel at exactly 0317 GMT. US West Texas Intermediate (WTI) CLc1 acquired 46 cents, equivalent to 0.9%, to $50.39.
The novel coronavirus growth rate eased to its lowest since Jan.31, according to figures released on Monday.
Travel restrictions going in and out of China and goods’ movement across the country negatively impacted fuel usage. Two largest Chinese oil producers disclosed their plans of cutting their production by 940,000 barrels per day (bpd) equivalent to 7% of their 2019 pacing due to inactive consumption.
“Concern over weak demand in China is forcing many producers to look for alternatives,” ANZ Research stated.
“Companies such as Vitol, Shell and Litasco have been preparing to hire supertankers to store crude that would be otherwise destined for China.”