Oil up after reports of coronavirus drug
LONDON - Oil prices jumped by more than 4% on Wednesday after media reports that scientists had developed a drug against the fast-spreading coronavirus that continues to weigh heavily on global economic activity.
The World Health Organization played down the media reports, saying there are “no known effective therapeutics” against the virus.
Lending further support to oil was news that the Organization of the Petroleum Exporting Countries (OPEC) and its producer allies are considering further output cuts to counter a potential squeeze on global oil demand.
Brent crude oil futures were up $2.44, or 4.5%, at $56.40 a barrel by 1535 GMT. U.S. West Texas Intermediate crude gained $2.15, or 4.3%, to $51.76.
China’s Changjiang Daily - the official newspaper of the city of Wuhan, where the virus outbreak originated - reported on Tuesday that a team of researchers led by Zhejiang University professor Li Lanjuan had found that drugs Abidol and Darunavir can inhibit the virus in vitro cell experiments.
Separately, Sky News reported that a British scientist has made a significant breakthrough in the race for a vaccine by reducing part of the normal development time from two to three years to only 14 days.
A vaccine will be too late for the current virus but the breakthrough will be crucial if there is another outbreak, Sky said.
With the spread of the virus continuing, thousands of passengers and crew on two cruise ships in Asian waters were placed in quarantine on Wednesday as airlines, car manufacturers and other global companies counted the cost of the outbreak.
Data from the U.S. Energy Information Administration (EIA) showed crude inventories rose by 3.4 million barrels last week, higher than forecast, slightly curbing oil price gains.
DEMAND IMPACT
The economic slowdown resulting from the outbreak is expected to reduce 2020 global oil demand growth by 300,000-500,000 barrels per day (bpd), roughly 0.5% of global demand, BP’s Chief Financial Officer Brian Gilvary said on Tuesday.