Brent crude prices rally after falling below $50 per barrel on Friday as sustained coronavirus fears triggered low oil demand and weak economic activity worldwide
The international benchmark declined below the key threshold of $50 a barrel at 0930 GMT, while American benchmark West Texas Intermediate (WTI) was trading at $44.98 a barrel at the same time.
Both benchmarks showed some little gains in the following hours, as Brent rose to $50.20 per barrel and WTI reached $45.36 a barrel at 1105 GMT, according to official figures.
While both benchmarks lost around 25% since the beginning of 2020, they are trading at their lowest levels in 14 months.
Investors are concerned over the negative, economic impact on Asian markets, particularly China, and also in Europe from the novel coronavirus Covid-19 that emerged in China and spread globally and which has provoked low oil demand while swelling the supply glut in the first half of 2020.
"As China’s coronavirus epidemic continues to expand and more countries are affected, the slowdown in global oil and gas consumption this year will hit suppliers who will see average prices fall below previous expectations," Rystad Energy said in a statement on Thursday.
Norway-based independent energy research and consulting firm stressed that at least 1 million barrels per day (bpd) of crude should be removed from the market to avoid a downside risk to crude prices.
OPEC and its allies were advised on Feb. 8 by a technical committee to deepen their oil production cut by an additional 600,000 bpd.
The group dubbed as OPEC+ has already been implementing a 1.7 million bpd output cut since the start of 2020. OPEC+ will meet in the Austrian capital Vienna on March 5-6 to discuss their strategy to balance prices and the possibility of further cuts.
By Ovunc Kutlu