Oil turns positive after five-day rout

LONDON: Oil futures on Tuesday broke a five-day losing streak after Opec sources said the group and its allies might tighten the market amid fears that the coronavirus which has claimed over 100 lives in China, might weigh on oil demand.
Brent crude reversed earlier losses to trade up 18 cents at $59.50 a barrel at 1245 GMT, after having hit a three-month low of $58.50 on Monday.
US West Texas Intermediate rose 30 cents at $53.44 a barrel, after slipping to its lowest since early October in the previous session. Both contracts are still on track for their worst monthly falls since May.
The United States and other countries warned against travel to China as the coronavirus death toll rose to more than 100 within China and after the virus was detected in more than a dozen other countries.
Japan, one of the world’s top oil buyers, warned about the risks to its economy from the virus, which has turned investors to safe-haven assets such as US Treasuries or gold.
Oil investors are concerned the outbreak could dampen demand for crude and related products against a backdrop of plentiful supply.
In Asia, jet fuel prices have dropped and refiners’ profits for the product have slumped to the lowest in more than 2-1/2 years, while industry analysts are cutting their 2020 forecasts for jet fuel and overall oil demand.
“If air passenger traffic in China declined by half in the first quarter of 2020, it would likely lead to a 300,000 barrels per day (bpd) year-on-year decline in jet-kerosene demand from China,” Barclays said in a note.
The bank said on Tuesday that oil prices could lose $2 per barrel, slipping to $62 per barrel and $57 per barrel on the bank’s full-year forecast for Brent and WTI, respectively.
— Reuters