Oil prices gained on Thursday amid rising optimism that the coronavirus has peaked and a drop in Libyan crude production levels to a little more than 120,000 barrels a day.
Brent was up 0.3 per cent at $59.33 per barrel at 2.18pm UAE time, while West Texas Intermediate was up 0.5 per cent at $53.55 per barrel.
"The market found support in still-growing optimism over a soon to be felt increase on Chinese economic activity and the prospect of Venezuelan export constraints increasing after Rosneft's trading arm saw additional sanctions being imposed by the US government," said Austria-based JBC Energy.
“While Atlantic Basin crude markets and outright prices have exhibited quite a bit of strength over recent days, we would caution against believing that there will be a straight move back to pre-virus levels.”
Oil rallied to a three-week high on Wednesday as markets factored in a further tightening of supply following the imposition of sanctions by the US against the trading arm of Russia’s Rosneft for off-taking Venezuelan crude.
The restrictions were imposed against Rosneft Trading and its president Didier Casimiro as Washington looked to increase pressure on Venezuelan president Nicolas Maduro.
Markets were also worried about supply outage from Libya, where fuel vessels were evacuated from the port of Tripoli on Wednesday, after missile attacks near a liquefied petroleum gas tanker.
Meanwhile, concerns over the coronavirus outbreak, which disrupted global supply chains, transportation and the travel industry and dragged oil prices down to 13-month lows, have eased after China reported a relative decline in the number of new cases.
The rebound in oil prices "is signalling that much of the coronavirus-driven development has been priced in, and barring an acceleration of new cases, oil markets should remain relatively supported until we get the first-look data surrounding supply chains and demand contraction contagion effects from China," said Ehsan Khoman, head of Mena research and strategy at Japanese bank MUFG.
Coronavirus cruise ship passengers disembark
Though the death toll from the virus rose to 2,118 in mainland China, the country has recorded declines in the number of new cases for several days, according to officials.
More than 74,000 people have been infected with the virus, known as Covid-19, which prompted China to place 60 million people on virtual lockdown.
China's economy has been heavily disrupted by the epidemic, with Beijing lowering its benchmark interest rate to stimulate the economy after companies scaled back or suspended operations.
The world’s second-largest economy consumes about 14 million barrels of oil a day.
