Oil futures edge up as market monitors OPEC+ discussions

Crude oil futures edged up in mid-morning trade in Asia Wednesday as the market looked for cues from the ongoing OPEC+ two-day technical committee meeting.

At 10:40 am Singapore time (0240 GMT), April ICE Brent crude futures rose 64 cents/b (1.19%) from Tuesday's settle at $54.60/b, while the NYMEX March light sweet crude contract rose 56 cents/b (1.13%) at $50.17/b.

Crude futures had settled down Tuesday at levels last lower in early January 2019, after OPEC and its allies ended the first half of a two-day meeting with no pronouncements on new production cuts.

The committee is expected to revisit the discussion on oil production cuts today and this lent some support to oil for now, even though this might be short-lived, analysts said.

"Additional OPEC+ cuts are necessary to put a floor on oil prices and the thought that they are unlikely to sit on their hands, even prompted a decent short-covering rally," said Stephen Innes, chief market strategist at AxiCorp.

However, Innes cautioned that with nearly 50% of China industrial complex shut, the market is headed for one of the worst first quarter economic growth periods on record.

Crude produced by the OPEC+ coalition is very exposed to the coronavirus outbreak, with China buying more than 70% of its supplies from the group, Platts reported.

OPEC+ is under pressure to stem a 20% plunge in oil prices since news of the coronavirus first broke.

Meanwhile, others remained watchful of the impact of the recent Libyan oil blockade.

"OPEC's own internal analysis estimates that demand could be impacted by 200,000 b/d. This comes as Libya's production continues to fall," said ANZ analysts in a note Wednesday.

The analysts at ANZ also highlighted that Libya production hit its lowest level since 2011 to around 204,000 b/d, amid the continued blockade of oil infrastructure.

As of 0240 GMT, the US Dollar Index was higher 0.06% at 97.875.