Oil Prices Swing as Investors Weigh Coronavirus Fallout

Oil prices seesawed this week as investors tried to gauge the fallout from the coronavirus that has sickened thousands in China and tamped down demand in the world's largest importer of oil.

Crude slid into a bear market on Monday, falling 20% from a recent peak hit in January, on worries about the coronavirus's effect on the global economy in a world flooded with oil. Prices then rose Wednesday amid unconfirmed reports that researchers at a Chinese university had found a treatment for the virus.

The rebound continued Thursday as the Organization of the Petroleum Exporting Countries and its allies met for a third day to debate a possible reduction in crude output. However, the cartel hit a snag when Russia rejected the Saudi- led effort to deepen OPEC's oil-production cuts.

U.S. crude futures fell 0.8% to $50.54 a barrel in Friday morning trade, while Brent, the global gauge of prices, fell 0.4% to $54.73 a barrel.

Analysts are forecasting sizable cuts to oil-demand growth as a result of the coronavirus, with JPMorgan slashing its global forecasts for the first quarter to 500,000 barrels a day from 1.15 million barrels a day. Investors are hoping the cartel and its allies will come to an agreement sometime next week.

"Overall, our neutral trading bias of this week is keeping us in a frame of mind in which we can construct a case for a WTI advance to about the $54 mark next week as easily as we can build an argument for a drop into fresh lows to around the $46 area," analysts at Ritterbusch & Associates wrote in a Friday note.

Elsewhere in commodities, natural-gas futures rose 1% to $1.881 per million British thermal units after hitting four-year lows earlier this week. A mild winter has weighed on prices of the commodity, and analysts have little hope for a weather-driven recovery as the season wanes and models continue to predict warmer temperatures.

Write to Sarah Toy at sarah.toy@wsj.com

  (END) Dow Jones Newswires
  02-07-20 1208ET
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