Oil Prices Mixed as Impact of Coronavirus Remains Unclear

Meanwhile, the World Health Organization may issue a global alarm: File Image/Pixa Bay

As conflicting opinions and general uncertainty about the impact and severity of China's coronavirus continue to grow, equally bewildered traders caused oil prices to be mixed on Wednesday, buoyed by the Organization of the Petroleum Exporting Countries' (OPEC) willingness to extend output cuts, and weighed down by swelling U.S. inventories.

Brent  rose 30 cents, or 0.5 percent, to settle at $59.81 per barrel, and West Texas Intermediate ended at $53.33, down 15 cents or 0.3 percent.

News from the Energy Information Administration that crude inventories rose by 3.5 million barrels last week and gasoline rose to an all-time high at 261.2 million barrels were especially troubling in light of reports on Wednesday that major airlines suspended direct flights to and from mainland China due to the coronavirus.

However, Michel Salden, senior portfolio manager of Vontobel Asset Management, maintained a calm outlook by saying that "Following the outbreak of coronavirus, commodities markets suffered from a technical selloff," but oil prices would likely rebound soon after a 14 percent drop so far.

Still, the prevailing mood about the crude market for the immediate future was pessimistic: Stephen Brennock, oil analyst at PVM Oil Associates, stated, "Will deeper OPEC supply curbs provide the panacea for the current oil market malaise? Probably not.

"The oil cartel, therefore, faces an uphill battle to support oil prices."

Ellen Wald, president of Transversal Consulting, said that although the long-term impact of the coronavirus is unclear, the market is nevertheless being "weighed down by fears of demand destruction."

Walk made these remarks as confirmed cases of the virus soaring to over 6,000 people in China prompted the World Health Organization to call a meeting on Thursday to consider issuing a global alarm.