Oil prices have risen by more than a dollar per barrel, having previously reached their lowest levels in the last few years. Commodities traders are currently confident that OPEC countries and their allies will agree to further cuts in production to counteract the declining demand. Investors are also confident that the various central banks will take the necessary action against the effects of the coronavirus outbreak.

The price of the international Brent variety is up by 1.36 USD, or 2.74%, to 51.03 USD per barrel. In turn, the futures on the US light crude oil WTI are up by 2.30% to 45.81 USD per barrel.

Both oil varieties mark their first increase after six sessions of decline in their values ​​amid concerns about the spread and impact of coronavirus. The infection has hit the financial markets seriously, with Wall Street reporting its worst week since the 2008 financial crisis last week.

“On the one hand, it has a negative impact on global demand for oil and petroleum products”, said Lachlan Shaw of National Australia Bank. “But on the other hand, Saudi Arabia is pushing for a reduction of one million barrels per day. The cuts are likely to be agreed this week, with central banks increasingly signaling that they will support markets by cutting interest rates”, added he.

Several key members of the Organization of the Petroleum Exporting Countries (OPEC) are considering further production cuts in the second quarter. The previous proposal was to further reduce production by 600,000 barrels per day.

Oil prices have fallen by over 20% since the beginning of the year, despite OPEC+ production cuts.

The current market values ​​of the raw material would encourage Russia to agree to a further reduction in production, although “any probable reduction in supply will be of short duration, for example, three months, and then the barrels will be returned to the market”, Fitch Solutions analysts comment.