Crude oil futures dip as coronavirus uncertainty clouds outlook

0238 GMT: Crude oil futures edged lower in mid-morning trade in Asia Monday amid an uncertain demand outlook in the wake of the coronavirus outbreak.

At 10:38 am Singapore time (0238 GMT), April ICE Brent crude futures were down 16 cents/b (0.28%) from Friday's settle at $57.16/b, while the NYMEX March light sweet crude contract edged lower 3 cents/b (0.06%) at $52.02/b.

"The oil price action continues to be swayed backward and forwards by news flow around the Covid-19 [coronavirus] infection/death rates and the prospects of OPEC+ agreeing a quota cut to balance off the demand slowdown," AxiCorp's chief market strategist Stephen Innes said Monday.

Prices have been volatile recently. Oil futures settled higher Friday amid optimism that oil demand destruction has peaked amid a slowdown in coronavirus cases outside China.

"However, with a reality check about to set in when the China high-frequency data start to roll in, and in the absence of the Russian compliance commitment, any excuse to sell still feels like the sentiment in the market right now," Innes added.

Travel restrictions and contagion fears were still preventing some employees in China from returning to work and factories expected only partial production restarts.

"While there remains a lot of uncertainty with regards to the coronavirus, in the ebb and flow of things around a matter as such, we may once again be seeing stabilisation set in through the week for markets," IG's market strategist Pan Jingyi said.

"This is of course barring any sudden worsening of the coronavirus situation," Pan added.

Meanwhile, the US added oil rigs for the week ending February 14, according to UOB analysts citing Baker Hughes data.

The increase was just two rigs and this brought the total to 678 oil rigs, still much lower to the 857 rigs recorded one year ago, the analysts highlighted in their industry note Monday.