Crude prices inched higher on Wednesday as investors covered short positions after three sessions of losses and eyed potential supply cuts, even as fears of a coronavirus pandemic deepened.
Brent crude rose 33 cents, or 0.6%, to $55.28 a barrel by 0513 GMT, while U.S. West Texas Intermediate crude gained 41 cents, or 0.8%, to $50.31 a barrel. Still, prices are down nearly 7% since last Thursday’s close.
Fears of a pandemic escalated as authorities around the world battled to prevent the spread of coronavirus, which has now been found in about 30 countries.
Asian shares fell on Wednesday as a U.S. warning to Americans to prepare for the possibility of a coronavirus pandemic drove another Wall Street tumble and pushed yields on safe-haven Treasuries to record lows.
Hideshi Matsunaga, analyst at Sunward Trading observed that “Investors unwound short positions after WTI dipped below a key support level of $50, as they have done a few times earlier this month,”
“The reduction in Libya’s output and expectations for additional production cuts by the Organization of the Petroleum Exporting Countries (OPEC) and OPEC+ are also lending support,” Matsunaga added.
