Oil rises above $56 as tighter supply offsets virus concern
Oil rose above $56 a barrel on Tuesday and stayed close to an 11-month high, as tighter supply and expectations of a drop in US inventories offset concerns over climbing coronavirus cases globally.
Saudi Arabia has said it will cut output by an extra 1 million barrels per day (bpd) in February and March to stop inventories from building up. The latest US oil supply reports are expected to show crude stocks fell for a fifth straight week.
“I think the market will be rapid to conclude that yesterday’s modest pullback in price, provided the virus spread in China remains contained, was but a blip on the radar screen,” Stephen Innes, chief global market strategist at Axi, said in a report.
