2020.03.0409:56:00UTC+00Oil Prices Rally On Hopes Of Deeper OPEC Cuts

Oil prices rose over 1 percent on Wednesday on hopes that OPEC and its allies will consider making substantial oil production cuts to lift prices amid the slump in demand caused by the global coronavirus outbreak.

Benchmark Brent crude for May delivery climbed 1.1 percent to $52.41 a barrel, while U.S. West Texas Intermediate (WTI) futures were up 1.4 percent at $47.83 a barrel.

On Tuesday, a technical panel of several representatives from OPEC states, Russia and other producers recommended cutting output by as much as an extra 1 million barrels per day (bpd) during the second quarter.

As the OPEC+ meeting in Vienna from March 5-6 approaches, it also recommended that existing cuts of 2.1 million bpd by the group may be extended until the end of 2020.

Media reports suggest that Russia and Saudi Arabia, the two biggest producers in the OPEC+ group, are close to the deal to support prices.

Meanwhile, investors were also reacting to data from the American Petroleum Institute showing that U.S. crude oil inventories rose in the most recent week.

Crude inventories rose by 1.7 million barrels in the week to Feb. 28 to 446.6 million barrels, compared with analysts' expectations for a build of 2.6 million barrels.

Risk sentiment improved somewhat today after the U.S. Federal Reserve announced an emergency rate cut in an extraordinary attempt to contain the coronavirus's economic fallout.

Speculation is rife that the European Central Bank will respond to the Fed's "decisive" interest rate cut with easing of its own.