Crude oil futures rise as sentiment improves ahead of key discussions among global leaders

New York — 0235 GMT: Crude oil futures surged in mid-morning trade in Asia Tuesday as sentiment improved ahead of key discussions including a G7 global teleconference and the OPEC+ meet later in the week.

At 10:35 am Singapore time (0235 GMT), May ICE Brent crude futures rose $1.26/b (2.43%) from Monday's settle to $53.16/b, while the NYMEX April light sweet crude contract rose $1.28/b (2.74%) to $48.03b.

"The air is rife with expectations that G-7 finance ministers and central bankers will move to prop up financial markets and that OPEC will tighten the reigns on supplies in response to the virus-driven demand shock," AxiCorp's chief market strategist Stephen Innes said Tuesday.

G7 finance ministers are expected to hold a conference call later to discuss measures to deal with the economic impact of the COVID-19 outbreak, according to media reports.

The OPEC+ group is scheduled to meet later this week in Vienna to discuss the future of its current 1.7 million b/d supply cut agreement, which expires at the end of March.

The group is weighing the recommendation to cut its quotas by another 600,000 b/d, in light of the overall weakness in the outlook for demand due to the global spread of COVID-19.

"Russia has been so far reluctant to discuss further output cuts, saying it wants to wait and see the impact of COVID-19 on demand," ANZ analysts said Tuesday.

"However, with prices now below the Russian central bank's budgeted level of USD$55/b, there are hopes they will be more willing to support the market to protect President Putin's aggressive spending program," the analysts added.

Nonetheless, the growing spread of COVID-19 outside China remains a cap on market recovery.

"Investors' confidence is slated to stay depressed as more COVID-19 cases were seen across the globe, led by Iran and South Korea," UOB analysts said Tuesday.

The global economy will grow by 2.4% in its "best case scenario" for the year ahead, down from its previous 2.9% estimate, added the UOB analysts, citing estimates from the Organization for Economic Cooperation and Development.