Oil futures rose for a second day on Thursday amid investor optimism over unconfirmed reports of possible advances in combating the coronavirus outbreak in China as a sign fuel demand may rebound in the world's biggest oil importer.
Brent futures rose by 98 cents, or 1.8%, to $56.26 a barrel by 0311 GMT, having risen 2.4% in the last session. US West Texas Intermediate (WTI) futures gained $1.08, or 2.1%, to $51.83 a barrel after rising 2.3% on Wednesday.
A committee that advises the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, a group known as OPEC+, is set to meet for a fourth day on Thursday. They are discussing whether to reduce oil production further to support prices after a multi-day slump over concerns about economic growth and energy demand caused by the outbreak.
"Oil markets are rebounding from the 5-day slide as investors turn optimistic that OPEC+ officials will deliver an appropriate response to ... the spread of the coronavirus," said Stephen Innes, chief market strategist at AxiCorp.
The Joint Technical Committee for OPEC+ has been meeting this week to consider increasing output cuts by an additional 500,000 barrels per day or to extend current cuts beyond March. OPEC+ ministers are due to meet on March 5 and 6.
Oil prices have slumped more than 20% since reaching their highest this year on January 8 on demand concerns caused by the virus outbreak and oversupply indications.
A technical market indicator known as the relative strength index, which measures buying and selling momentum, suggests that prices have fallen too far, too fast and investors may be buying futures in response.
In the last two days, commodities, equities and other markets have been buoyed by unconfirmed reports of a possible advance in producing treatment drugs for the coronavirus that has shut down transport and limited industrial activity in China.
However, the World Health Organization has played down the reports of "breakthrough" drugs being discovered.
A further 73 people on the Chinese mainland died on Wednesday from the virus, the highest daily increase since the outbreak started, and another 3,694 new cases were reported, raising the total to 28,018.
Commodity supply chains in China have been disrupted to the extent that short-term sales of crude oil, along with liquefied natural gas, fell to nearly zero this week.
Buyers in China, the world's biggest importer of most commodities, are considering taking legal action to avoid honouring purchase agreements.
In the US, gasoline stockpiles dropped last week, counter to analysts' expectations for a gain, and diesel inventories fell more than expected, the Energy Information Administration reported. However, crude stockpiles rose rose by a more-than-expected 3.4 million barrels last week to 435 million barrels.