Crude oil futures inched higher in mid-morning Asian trade Thursday, extending overnight gains, as the market waited for an outcome on the OPEC+ production cuts with Russia yet to take a stand.
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At 10:25 am Singapore time (0225 GMT), April ICE Brent crude futures was up 16 cents/b (0.29%) from Wednesday's settle to $55.95/b, while the NYMEX March light sweet crude contract was 27 cents/b (0.52%) higher at $51.44/b.
"Oil is up as OPEC awaits an official response from Russia regarding proposed production cuts," Stephen Innes, chief market strategist at AxiCorp, said.
"[But] the markets have a sizeable glut to deal with, and the EIA report did little to alleviate those oversupplied concerns," Innes said, adding that market attention is refocused on whether Russia agrees to the additional cuts.
US commercial crude inventories increased 7.46 million barrels to 442.47 million barrels in the week that ended February 7, US Energy Information Administration data showed Wednesday.
The OPEC+ Joint Technical Committee last week recommended that the alliance of OPEC members, Russia and nine other countries cut production by an additional 600,000 b/d through the second-quarter.
Russian energy minister Alexander Novak on Wednesday met with Russian oil producers ahead of the next meeting in an effort to determine Russia's stance, but has yet to announce its decision, Platts reported.
OPEC shaved about 230,000 b/d from its 2020 world oil demand forecast in its latest monthly report released late Wednesday.
Investors remain vigilant around further developments of the coronavirus, now designated as COVID-19 by the World Health Organization, outbreak which is expected to curtail commodities demand in the near term.
"Although sentiment improved overnight, it may be worthwhile still exercising some caution especially as infections outside China are still on the rise," Vishnu Varathan, senior economist at Mizuho Bank, said.
Chinese health officials in the Hubei province reported 242 new deaths and 14,840 new cases of the virus Wednesday, after Chinese officials broadened their definition of confirmed cases, according to media reports.
"A sudden upward revision in the number of coronavirus cases by Hubei casts a shadow on markets going into the Thursday session, though the trajectory from here remains to be ascertained," Pan Jingyi, market strategist at IG, said.