Market and product

Oil futures gave up early gains on Thursday despite possible action from the OPEC+ group of producers to counter an expected fall in oil demand as a consequence of the coronavirus outbreak.

A OPEC+ technical panel has recommended a provisional cut in oil output of 600,000 barrels per day (bpd), though Russia has yet to declare its position on the matter, two sources said.

Brent futures were down 88 cents at $54.40 a barrel by 1453 GMT, while U.S. West Texas Intermediate (WTI) futures were down 29 cents at $50.46.

The Joint Technical Committee (JTC) is not a decision-making body but advises the OPEC+ group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia.

“Saudi Arabia seems ready to push for a very proactive and immediate production response,” bank RBC said in a note.

There was some price support, however, from optimism that trade tensions between China and the United States are easing.

China on Thursday said it would halve additional tariffs levied against 1,717 U.S. goods last year after the signing of a Phase 1 trade deal between the two countries.

This makes China’s goal to increase its U.S. purchases to $200 billion over the next two years more achievable,” JBC Energy said in a note.

Oil prices have fallen more than 20% since reaching their highest this year on Jan. 8 because of concerns the virus will lead to reduced demand and signs of oversupply. - Reuters-