Fundamental Comment

Oil extends recovery amid unconfirmed reports on new vaccine

Oil extends recovery amid unconfirmed reports on new vaccine

Oil prices continued to recover during Thursday's trading amid some unconfirmed reports that suggest scientists are considering developing a vaccine for the deadly coronavirus.  

As of 07:29 GMT, Brent crude reached $56.19 per barrel, compared to the session’s open at $55.62 a barrel, while the highest level in the day was hit at $56.57 a barrel, to recover for the second consecutive session.

West Texas Intermediate (WTI) crude futures traded at $51.73 per barrel, where it hit a low of $49.30 on Tuesday, the lowest since early January 2019.

Crude prices rose more than 4 percent during the previous session with reports of the discovery of a drug that would cure the coronavirus

However, the World Health Organization remarked that there were no cures yet to the virus that began in Wuhan province of China.

Investors around the world are following the development of the Corona virus amid fears that it could lead to a slump in global oil demand, as China is the world's largest importer of crude and has been the main driver of global demand in recent years.

About Corona Virus, the number of deaths from the Chinese virus has risen to 490, with more than 24,000 infected.

However, Asian stock markets continued to rebound on Thursday, as China CSI 300 index edged up 1.86 percent, Hang Seng index added 2.4 percent and Japan’s Nikkei 225 index soared 2.38 percent.

The Organization of Petroleum Exporting Countries (OPEC) and non-member allies, including Russia, announced that the talks in Vienna would continue for a third day on Thursday after they failed to reach a recommendation on an emergency meeting of oil ministers.

OPEC+ may increase output cuts by an additional 500,000 barrels per day or extend current cuts beyond March, where OPEC+ ministers are scheduled to meet on March 5 and 6.

Oil prices ignored a report from the U.S. Energy Information Administration (EIA) revealing that crude inventories rose more than expected last week by 3.4 million barrels to 435 million barrels, exceeding expectations of a rise of 2.9 million barrels.

Meanwhile, the dollar index, which measures the performance of six major currencies against the US dollar, slumped by 0.02 percent at 98.14.

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