Opec chops global oil demand growth forecast over China virus

Crude oil futures gain on global cues

Its oil demand has nearly doubled since 2003 and represented more than three-quarters of global oil demand growth past year.

"Our baseline thesis remains that oil demand destruction remains largely a China story and has yet to spill over to impact global demand", said Helima Croft, head of commodity strategy at Citadel Magnus.

Brent crude was up $1.05 cents or 1.9% at $57.39 a barrel by 1437 GMT.

OPEC and its allies, a group known as OPEC+, could agree to further output cuts when they next meet, possibly as early as this month. The organisation and its allies led by Russian Federation have implemented such curbs since 2017 to revive prices that had become depressed by a glut of crude.

The International Energy Agency (IEA) has cut its 2020 growth forecast, saying that global energy demand is going to fall to the lowest level since 2011, having been hit hard by the coronavirus outbreak.

"The Russians have pretty much signalled that everyone is on board for OPEC+ delivering deeper production cuts", said Edward Moya, senior market analyst at OANDA Corporation in NY.

The agency said that the consequences of the outbreak for oil demand "will be significant". This will mark the first quarterly contraction in more than a decade and will have an impact on annual results, the IEA said in its oil market report, released on Thursday.

According to the February short-term energy forecast EIA, OPEC cut oil production by 500 thousand barrels per day in March-may because of lower expected global demand at the beginning of 2020. It has risen 5.4% since last Friday, its first weekly increase in six weeks.

U.S. Energy Secretary Dan Brouillette told Reuters the coronavirus epidemic in China had had a marginal impact on energy markets and was unlikely to dramatically affect oil prices even if Chinese demand fell by 500,000 barrels per day.

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