Oil on Friday clinched the best weekly gain for this year on signs that the worst economic effects of a lethal viral outbreak have been accounted for, easing concern about free-falling demand for crude.
Futures advanced 1.2 percent in New York, settling at more than US$52 for the first time this month.
Investor confidence was lifted after China reassured the international community that a huge spike in new cases of COVID-19 was a one-off event.
The optimism outweighed Goldman Sachs Group Inc slashing its crude demand growth forecast for this year almost in half and lowering its first-quarter oil price estimate by 16 percent.
“There’s no doubt this rally will inspire more confidence for oil markets,” KeyBanc Capital Markets Inc analyst Leo Mariani said.
OPEC and its allies have signaled a desire to stabilize the oil market, which has tumbled almost 15 percent this year as the coronavirus wreaked havoc on the world’s second-largest economy and beyond.
The past two weeks have been rife with uncertainty for oil markets as Riyadh’s push for an early meeting this month and fresh production cuts face an impasse with Russia.
OPEC and its allies were close to abandoning any plans for an emergency meeting, although Saudi Arabia had not given up on the proposal outright, several delegates from the group said on Friday.
The outbreak has intensified concerns about crude demand, prompting technical experts from the coalition to propose deepening supply cuts by 600,000 barrels per day to relieve excess inventories.
“Expectations are low, but markets still expect some incremental action from OPEC,” Mariani said.
Chinese independent refiners have seized on the slump in oil prices to bulk up on cheap cargoes in a sign that they might be positioning for an eventual rebound in demand.
West Texas Intermediate crude for delivery next month gained US$0.63 to settle at US$52.05 per barrel on the New York Mercantile Exchange.
Brent for April settlement rose 1.7 percent to settle at US$57.32 on the ICE Futures Europe exchange.
The structure of the Brent futures market also flipped into a backwardation, signaling that some of the oversupply might have eased.
In other energy trading, wholesale gasoline was unchanged at US$1.58 per gallon and heating oil climbed US$0.02 to US$1.70 per gallon, while natural gas rose US$0.01 to US$1.84 per 1,000 cubic feet.
Gold rose US$7.60 to US$1,582.70 per ounce and silver rose US$0.12 to US$17.72 per ounce, while copper fell US$0.01 to US$2.61 per pound.
Additional reporting by staff writer
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