By Grant Smith and Ann Koh
Prices also strengthened in tandem with equities and other commodities. While the number of confirmed infections in China has overtaken the official number recorded during the 2003 SARS epidemic, it’s still unclear how severely world oil consumption will be affected.
“If strength in China’s demand isn’t there, then global demand growth will suffer very quickly,” said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. “But market fundamentals are still on track to tighten toward the middle of the year.”
Traders have also taken some reassurance from comments by Saudi Arabia and other OPEC members that they’re prepared to act to shore up the market. The alliance, which has already cut production, will consider prolonging curbs to the end of the year — or even deepening them — when it gathers in early March, a delegate said on Jan. 27.
West Texas Intermediate for March delivery rose 42 cents to $53.90 a barrel on the New York Mercantile Exchange as of 8:18 a.m. New York time. The contract settled up 0.6% on Tuesday.
Brent for March settlement advanced 1% to $60.11 a barrel on the London-based ICE Futures Europe exchange.
U.S. crude stockpiles are currently at a three-month low after substantial declines in December. Contrary to the API figures, analysts surveyed by Bloomberg are forecasting a 1.29 million-barrel increase in inventories ahead of the official Energy Information Administration data.