Oil prices steady amid possibility of deeper supply cuts

Oil prices steadied on Friday in Asia amid possibility of deeper supply cuts from major producers.

US Crude Oil WTI Futures inched up 0.1% to $51.48 by 12:30 AM ET (04:30 GMT). International Brent Oil Futures was little changed at $56.35.

The Organization of the Petroleum Exporting Countries (<a href=’https://staging.theenergyyear.com/companies-institutions/opec/’>OPEC) lowered its 2020 demand forecast for its crude by 200,000 barrels per day, citing worries about the coronavirus outbreak in China, the world’s biggest oil importer.

The news prompted expectations the producer group could cut output further.

“The Russians have pretty much signaled that everyone is on board for OPEC+ delivering deeper production cuts,” said Edward Moya, senior market analyst at OANDA in New York, in an Al Jazeera report.

“Crude’s price action possibly suggests a firm bottom is in place. As long as the coronavirus does not show strong signs that the spreading of the virus is intensifying, WTI crude could make a run towards the mid-$50s,” Moya added.

The International Energy Agency, meanwhile, estimated a drop of 435,000 barrels a day during the first three months of the year. It had previously expected world fuel consumption to grow by 800,000 barrels a day compared with a year earlier.

The expected decline in demand prompted the agency to cut its 2020 growth forecast by 365,000 bpd to 825,000 barrels a day, the lowest since 2011.

Oil prices have slumped about 20% from their peaks in early January as oil demand from China plunged due to travel restrictions to and from the country.