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Oil prices have increased as much as 1% from the previous session’s drop as hopes have risen for new output cuts to match a fall in demand.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia were planning to cut crude output due to impact on fuel demand from coronavirus outbreak.

According to Reuters, Brent crude futures were up $0.45 at $54.94 a barrel by 8:24am GMT. US West Texas Intermediate (WTI) crude was up $0.68 at $50.79 a barrel.

Citing people familiar with the matter, Reuters said that OPEC+ may cut crude output by a further 500,000 barrels per day (bpd).

CMC Markets analyst Margaret Yang was quoted by the news agency as saying: “A some half-a-million barrels (per day) cut is expected but we won’t rule out an even deeper cut should the situation worsen.

“This expectation boosted oil trading today.”

Investment bank UBS has also revised its oil demand growth estimate for 2020 down to 900,000bpd from 1Mbpd. It anticipates curbs in supply from OPEC+ until this year-end.

Reuters quoted Goldman Sachs as saying: “Oil prices are now at levels where we would expect a supply response from both OPEC and shale producers, and where China would likely seek to build crude inventories.”

The death toll from the virus has reached 427, including the one reported in the Philippines, and the number of cases of infection has increased to 20,623 as of the end of 3 February. This is an increase of 65 deaths from the day before.