Crude oil futures rebound after sharp fall, but bearish mood lingers

Singapore — --0230 GMT: Crude oil futures found a floor in mid-morning trade in Asia Tuesday after retreating sharply Monday, but analysts said that the prevailing bearish sentiment continues to linger.

At 10:30 am Singapore time (0230 GMT), April ICE Brent crude futures rose 83 cents/b (1.56%) from Monday's settle at $54.10/b, while the NYMEX March light sweet crude contract rose 70 cents/b (1.41%) at $50.27/b.

"Crude oil prices were stable early in the session as the market's concerns over the impact of the coronavirus subsided," analysts at ANZ said in a note Tuesday.

"Chinese-based manufacturers began to restart factories on Monday, although the speed with which they will return to full capacity is unknown," the analysts at ANZ added.

Sentiment remains bearish amid oversupply concerns and the expected hit on oil demand following the coronavirus outbreak.

Oil prices had settled sharply down Monday as Russia remains undecided on an OPEC+ proposal to cut an additional 600,000 b/d of crude production.

"And while OPEC and friend dither, bearish awareness continued to unfold concerning the absolute demand damage that the shut down of the swathes of the Chinese economy is going to do to oil demand," Stephen Innes, chief market strategist at AxiCorp, said.

S&P Global Platts Analytics' worst-case scenario for the outbreak shows a drop of 4 million b/d in global oil demand in February; its best-case scenario shows a drop of 1.5 million b/d in oil demand for February.

As of 0230 GMT, the US Dollar Index was up 0.04% at 98.725.

--Jeslyn Lerh, jeslyn.lerh@spglobal.com

--Edited by Norazlina Juma'at, norazlina.jumaat@spglobal.com