For the second day, oil prices rose on Wednesday, recouping some losses after a five-day rout on talk that OPEC could extend oil output cuts if a new coronavirus hurts demand.
Data also showing a decline in U.S. stockpiles helped steady prices.
Brent crude LCOc1 rose 58 cents, or 1%, to $60.09 a barrel by 0730 GMT. U.S. crude was up 55 cents, or 1%, at $54.03 a barrel.
Financial markets that have been hit by the spread of the virus out of China are trying to assess the economic fallout, with the death toll rising to 132 and airlines reducing flights to China.
“Price action since last Tuesday does suggest that the market is pricing in a fairly sizeable demand impact,” ING Research said in a note.
“The big unknown for markets is for how long will travel restrictions be in place, and could these get even stricter,” the bank said.
British Airways suspended all direct flights to and from mainland China after Britain warned against all but essential travel to the country, and jet fuel demand has slumped in Asia as airlines have canceled connections.
OPEC wants to extend oil production cuts until at least June from March, and may deepen the reductions should demand for oil in China be significantly reduced by the spread of the virus, OPEC sources said.
The Organization of Petroleum Exporting Countries (OPEC) and allies including Russia, have been trying to stabilize prices amid questions over the global demand outlook and rising supplies, particularly out of the United States.
“A further extension is a strong possibility and a deeper cut is a possibility,” one OPEC source told Reuters. Any fallout of the China virus on oil demand is likely to be clearer over the coming week, the source said.
In the United States, crude oil inventories fell by 4.3 million barrels last week, data from industry group the American Petroleum Institute showed on Tuesday, compared with analysts’ expectations of a gain of 482,000 barrels.
Gasoline stocks were up by 3.3 million barrels, compared with forecasts in a Reuters poll of a 1.3 million-barrel gain.
Distillate fuel inventories, which include diesel and heating oil, fell by 141,000 barrels, against expectations of a 1 million barrel drop.
Official figures on oil and products are due out from the Energy Information Administration later on Wednesday.