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New York — A crude price rally extended for a third straight session Thursday amid optimism that the Covid-19 coronavirus outbreak would soon peak.

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NYMEX March WTI settled up 25 cents at $51.42/b, and ICE April Brent was 55 cents higher on the day at $56.34/b.

Futures came under pressure overnight amid reports of a sharp uptick in coronavirus cases and deaths in China. Globally, the number of confirmed cases has risen to 60,364, with 59,826 of those in China, according to the Johns Hopkins University.

In Hubei province, where the number of new cases and deaths were initially reported to be stabilizing, an additional 242 deaths and 14,840 new diagnoses were recorded Wednesday, according to media reports citing Chinese government figures.

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NYMEX March ULSD settled up 48 points at $1.6805/gal, and March RBOB was 8 points lower at $1.5802/gal.

Travel restrictions and contagion fears were still preventing some employees in China from returning to work Thursday, and factories expected only partial production restarts, with some delaying a return to operations until late February or early March. But the market remained bullish that the outbreak's economic impact would be limited.

"Markets are still convinced that this is just going to be a first-quarter, possibly April, event that will be predominately impacting China," OANDA Senior Market Analyst Edward Moya said. "Optimism is still strong that the virus will peak."

Outside of mainland China there are only 175 confirmed cases of the disease and three fatalities, according to World Health Organization data.

Brent and WTI forward curves strengthened Thursday, even as demand outlooks waned. The contango in one-year WTI futures narrowed to 41 cents/b from 56 cents/b Wednesday, and the one-year Brent curve flipped to a 15 cent/b backwardation from a 15 cent/b contango the session prior.

The International Energy Agency on Thursday slashed its oil demand forecast for 2020 by almost 500,000 b/d and said demand will contract for the first time in a decade during the first quarter because of the impact of the coronavirus outbreak on China's economy.

The move comes on the heels of OPEC on Wednesday shaving 230,000 b/d off its 2020 world oil demand growth forecast due to the outbreak.

The coronavirus is expected to reduce world oil demand by 1.1 million b/d in Q1 and by 345,000 b/d in Q2, the IEA said, slashing its oil demand forecast for 2020 by almost 500,000 b/d. Overall 2020 oil demand is now forecast at 100.97 million b/d, 480,000 b/d below the IEA's previous estimate.