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Oil prices climbed on Thursday, hours before the world’s largest oil producers are scheduled to meet to discuss output cuts as the coronavirus pandemic ravages demand.
Brent crude futures rose 2.5 percent or 81 cents to $33.65 as of 00:34 GMT after touching a high of $33.90, adding to gains in the previous session.
United States crude futures were up 4.3 percent, or $1.08, at $26.17, having climbed as much as 6 percent the day before.
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, a group known as OPEC+, are set to convene a video conference meeting on Thursday.
The meeting is expected to be more successful than their gathering in March, where they failed to agree to extend supply cuts and triggered a price war between Saudi Arabia and Russia.
Hopes of an agreement to cut between 10 million and 15 million barrels per day (bpd) rose after media reports suggested Russia was ready to reduce its output by 1.6 million bpd and Algeria’s energy minister said he expected a “fruitful” meeting.
“I think there’ll be a deal, which will bring a bit of cheer in the short run. Then everyone’s attention will refocus on the fundamentals. The fundamentals are appalling,” Lachlan Shaw, head of commodity research at National Australia Bank told Reuters news agency.
Global demand for oil has shrunk significantly as the coronavirus outbreak triggered travel restrictions and temporary business closures. In India, the world’s third-biggest consumer, oil demand has collapsed as much as 70 percent, according to officials at the country’s refiners.
In contrast to oil prices, Asian shares were mixed on Thursday after a three-day rally, with investors mulling the spread of the coronavirus and when economies will be able to ramp up again.
Shares in Tokyo dipped with the Nikkei declining 0.23 percent in early trade, but were higher in Sydney and Seoul. Australia’s S&P/ASX 200 was up 1.51 percent and South Korea’s Kospi gained 1.3 percent.
In China, blue chips declined 0.47 percent while the broader Shanghai Composite Index fell 0.19 percent. Hong Kong’s Hang Seng Index was also in the red, down 1.17 percent.
US S&P 500 Index futures edged up after the gauge jumped 3.4 percent on Wednesday as Joe Biden emerged as the Democratic frontrunner in the US presidential race, bringing its rise from the March low to more than 20 percent.
But investors are still looking at numbers of new coronavirus cases and deaths for clues on where the global economy is headed.
“It’s all a question of when the economy reopens and how quickly that happens,” Nancy Davis, a chief investment officer with Quadratic Capital Management LLC told Bloomberg. “We aren’t out of the woods.”
While the White House’s top health advisers are developing medical criteria for safely reopening the US economy in coming weeks should these trends hold steady, the coronavirus killed a record number of victims in the United Kingdom and Belgium, as well as in the hard-hit states of New York and New Jersey. The number of new cases in Italy and Spain crept up after several days of declines.
