Oil prices up with hopes of deeper OPEC production cuts

By Ovunc Kutlu

ANKARA (AA) - Crude oil prices were up on Wednesday as the global oil market and investors hope that the Organization of Petroleum Exporting Countries (OPEC) would make deeper cuts in crude production to support low prices.

The international benchmark Brent crude was trading at $54.20 per barrel at 0723 GMT for a 0.7% increase after closing Tuesday at $53.81 a barrel.

American benchmark West Texas Intermediate was at $49.77 a barrel at the same time for a 0.3% gain after ending the previous session at $49.59 per barrel.

The death toll in China from the novel coronavirus outbreak has climbed to 491, while 24,324 confirmed cases have been reported so far and 65 people have died in the last 24 hours, according to the country’s National Health Commission (NHC) on Tuesday.

Oil prices have hit their lowest level in 13 months on Tuesday due to weak global oil demand amid worries that coronavirus could have a negative impact on Asian economies.

In order to discuss the current condition of the oil market, OPEC has started Tuesday a two-day technical committee meeting in Vienna, Austria.

The Permanent Representative of the People’s Republic of China to the United Nations, Ambassador Wang Qun, shared the latest information on the coronavirus and the measures being taken by the Chinese government to contain it with the committee in Vienna, OPEC said via its Twitter account on Tuesday.

OPEC General Secretary Mohammed Barkindo said in another tweet “The proactive public health measures you [China] have undertaken; and the steady flow of data provided to the world at large is impressive and commendable."

The group and its allies, dubbed as OPEC+, could make deeper cuts in their production levels when they meet in Vienna in March 5-6 for their scheduled meeting in order to support crude prices, according to analysts.

To trim the glut of supply in the market, OPEC+ agreed on Dec. 6 to curb their production by an additional 0.5 million barrels per day (bpd) starting from Jan. 1. That added to their existing output cut of 1.2 million bpd that had been decided in December 2018.