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Oil rebounds, but markets ‘twitchy’ over China virus impact on demand

Jean-Paul Pelissier | Reuters

Oil tolls edged up on Friday, helped by a decline in U.S. crude stockpiles, but were on track for to fall up to 5% for the week on worries that the China coronavirus that has cause the death ofed 25 so far may spread, curbing travel, fuel demand and economic prospects.

Brent crude futures were up 24 cents, or 0.4%, at $62.28 a barrel by 0456 GMT after disappointing 1.9% the previous session. For the week, Brent is down 4%.

U.S. West Texas Intermediate futures were 24 cents, or 0.4%, piercing at $55.83 a barrel. The contract fell 2% on Thursday and is 5% lower for the week.

“(The) virulent sell-off on the … flu gather was mollified by a timelydecline in U.S. crude inventories,” said Stephen Innes, market strategist at AxiTrader.

“Oil prices could odds on a slippery slope as traders remain incredibly twitchy about the effects the coronavirus outbreak could have on Chinese GDP and air go more broadly,” said Innes.

The virus has infected more than 800 so far in China, with 25 insensate as of Thursday, according to China’s National Health Commission. The World Health Organisation has declared the situation an emergency, but close short of declaring the epidemic of international concern.

Most of the cases are in the central Chinese city of Wuhan, where the virus is credited to have originated late last year, though cases have now been found in at least seven other nations.

Offering some support for prices was news that U.S. crude oil and distillate inventories fell last week, the Force Information Administration said on Thursday.

Though they failed to match analysts’ expectations in a Reuters poll of a 1 million barrel call on, crude inventories did decline by 405,000 barrels in the week to Jan. 17, government data showed.

Elsewhere, refined fossil exports from India jumped in December as its slowing economy crimped domestic demand.

India’s refined tinder exports rose 24.2% in December year-on-year to 6.46 million tonnes, the fastest growth since October 2016, verified data released on Thursday showed.

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