Oil up on slowing pace of coronavirus, Venezuela sanctions

Oil prices rose on Wednesday, with Brent gaining for a seventh straight day after a slowing of newcoronavirus cases in Chinaeased demand worries and supply was curtailed by a US move to cut more Venezuelan crude from the market.

Brent crude was up by 75 cents at $58.50 a barrel by 1003 GMT, while US oil was up 66 cents at $52.71 a barrel.

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China, the world's second-largest economy, has imposed city lockdowns and travel restrictions tocontain a virusthat has now killed more than 2,000 people, stoking concern over an economic slowdown and a hit to oil demand.

Also Read:Oil prices fall on oversupply worries as virus hits China demand

"Those in doubt of the economic impact from the virus should take heed from Apple's surprise sales warning ... Put simply, this is the surest sign yet of thecoronavirus fallout on the global economy," said PVM analysts in a note.

S&P Global Ratings said it expected coronavirus would deliver a "short-term blow" to economic growth in China in the first quarter, echoing findings by the International Energy Agency.

Official data showed new cases in China fell for a second straight day, although the World Health Organisation has cautioned there is not enough data to know ifthe epidemic is being contained.

Brent has risen nearly 10 per cent since falling last week to its lowest this year. The market structure is also showingsigns of prompt demandfor oil picking up, as the front-month Brent futures market is moving deeper back into backwardation when near-term prices are higher than later-dated prices.

Also Read:China virus could hit oil prices by $3 per barrel: Goldman

This week,oil priceswere also buoyed by a US decision to blacklist a trading subsidiary of Russia's Rosneft which President Donald Trump's administration said provided a financial lifeline to Venezuela's government.

The grouping, known as OPEC+, has beenwithholding supply to support pricesand meets next month to decide a response to the downturn in demand resulting from the coronavirus epidemic.

But in the United States, which is not party to any supply cut agreements, crude oil production has been rising asshale output grows. US shale production is expected to rise to a record 9.2 million barrels a day next month, according to the Energy Information Administration.