2020.03.0210:11:00UTC+00Oil Prices Rebound On Stimulus Bets, Output Cut Hopes

Oil prices rebounded on Monday after hitting multi-year lows earlier in the session on concerns about the spread of the coronavirus.

Benchmark Brent crude jumped 1.7 percent to $50.52 a barrel, after having fallen to as low as $48.40, the lowest since July 2017.

U.S. West Texas Intermediate crude futures were up 1.35 percent at $45.36 after hitting a 14-month low of $43.32 earlier in the session.

The rebound in oil prices came as weak China data helped spur bets that major central banks will step in to counter the impact of the coronavirus epidemic on global growth.

China's Markit/Caixin manufacturing Purchasing Managers' Index (PMI) dropped to 40.3 in February, falling well below expectations of a reading of 45.7. The official PMI dropped to 35.7 in the month - the lowest level on record.

The non-manufacturing PMI tumbled to 29.6 last month, largely due to the coronavirus lockdown in most provinces that inhibited business activities.

The U.S. Federal Reserve is likely to join other global central banks in cutting interest rates aggressively in response to the coronavirus scare, Goldman Sachs economists said Sunday.

The Bank of Japan signaled today that it will make every effort to ensure stability in financial markets roiled by the coronavirus outbreak.

The Bank of England said it would take all necessary steps to maintain market stability.

Markets are also pricing in another cut to the ECB's key interest rate, which has been negative since 2014.

Meanwhile, media reports suggest that OPEC could agree on deeper oil supply cuts this week, with or without Russia's support, amid fears the coronavirus outbreak will erode oil demand. The previous proposal was for an additional output cut of 600,000 bpd.