Oil edges down as traders assess China's oil demand

US crude oil stocks production up for w  ending Feb. 7

It revised its outlook for world oil demand progress downwards to 0.99 million barrels per day (bpd) in 2020, down by 0.23 million bpd from the earlier month's estimate.

Oil prices sank to a one-year low on Monday as the infection leaves businesses idle and millions quarantined in the world's biggest crude importer.

Worries over supply were not alleviated on Friday when Russian Federation said it needed more time to decide on a recommendation from a technical committee that has advised the Organization of the Petroleum Exporting Countries (OPEC) and its allies to cut production by a further 600,000 barrels per day (bpd).

Demand worries flipped the oil market into a contango last week, a market structure where prices for near-term contracts are lower than those for later contracts, indicating ample supplies.

In a closely-watched monthly report published Wednesday, OPEC cut its forecast for oil demand growth this year, saying the coronavirus outbreak was the primary reason.

On Thursday, benchmark Brent crude was buying and selling at $55.73 per barrel, whereas U.S. West Texas Intermediate (WTI) was buying and selling at $51.21 per barrel.

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The anticipated decline in demand prompted the company to chop its 2020 progress forecast by 365,000 b/d to 825,000 barrels a day, the bottom since 2011.

Oil's slump has spurred the Organization of Petroleum Exporting Countries' biggest exporter, Saudi Arabia, to press fellow members and allies to hold an emergency meeting and consider new output cutbacks.

"The scale of cut adjustments may then need to be quite significant and would represent a substantial negative impact on Opec+ domestic economies. Carrying the cuts forward for the whole year wouldn't eliminate a surplus in H1 but would bring markets much closer to balance on average for the year", Bell said in a note.

Global oil demand will suffer its first quarterly drop in a decade as the COVID-19 virus lashes the economy in China and its impact ripples throughout the world, the IEA said Thursday.

"Lower oil prices, if sustained, are also bad news for highly responsive USA oil companies, but we are unlikely to see an impact on output growth until later in the year", the agency said.

"The bottom seems to be in place for oil prices", said Edward Moya, analyst at brokerage OANDA. We hope that we have succeeded by giving you the full details and information.

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