OIL FUTURES: Crude extends gains on supply shocks, easing coronavirus concerns

Singapore — 0619 GMT: Crude oil futures edged higher in the Asian afternoon trade on Thursday, extending gains from the previous session as supply concerns emerged from OPEC producers Venezuela and Libya, while demand concerns related to coronavirus eased.

At 2:19 pm Singapore time (0619 GMT), the April ICE Brent crude futures rose 27 cents/b (0.46%) from Wednesday's settle at $59.39/b, while the NYMEX March light sweet crude contract rose 25 cents/b (0.47%) at $53.54/b.

Oil prices have seen a boost of late, having closed on Wednesday at a high not seen since Jan. 29.

Slowing cases of new coronavirus cases in China provided a much needed relief to the crude market.

"While concerns linger on the economic implications of coronavirus' impact, positive signs have certainly been present," Pan Jingyi, market strategist at IG, said in a note Thursday, citing a fall in new cases in Singapore and China on Wednesday.

Meanwhile, on the supply side, US sanctions on Russia's Rosneft, which operates in the Venezuelan oil sector, as well as a breakdown in Libyan cease-fire talks resulted in renewed fighting around the capital's port, providing further boost to oil prices.

"The unexpected supply shocks [from Venezuela and Libya] have come as a welcome relief to the oil industry against the backdrop of the coronavirus outbreak," Stephen Innes, chief market strategist at AxiCorp, said in a note on Thursday.

However, despite all the positive news, analysts still warn that there could be further bumps ahead.

"It is probably premature to think the worst of the economic impact is by and large over," Innes added in his note.

The American Petroleum Institute, reported late Wednesday that U.S. crude supplies rose by 4.2 million barrels for the week ended Feb. 14.

"Despite all the evidence from the real world yelling the opposite, markets ignored another giant climb in US Crude Inventories by 4 million barrels," Jeffrey Halley, senior market analyst for Asia Pacific at Oanda, said in a note on Thursday.

Market participants will look to fresh cues from the inventory report by the Energy Information Administration, due later on Thursday.