2020.02.1209:06:00UTC+00Oil Prices Rally As Virus Fears Recede

Oil prices rose sharply on Wednesday as reports of an apparent slowdown in the rate of coronavirus infection helped ease concerns surrounding the negative impact on fuel demand.

Benchmark Brent crude jumped 1.9 percent to $55.05 per barrel, while U.S. West Texas Intermediate (WTI) futures were up 1.45 percent at $50.656 a barrel.

According to data through Tuesday, the growth rate of new coronavirus cases in China has slowed to the lowest since Jan. 30.

U.S. President Donald Trump said Chinese President Xi Jinping told him the deadly virus will be gone by April as temperatures begin rising.

The new outbreak is hitting a peak and may be over by April, Zhong Nanshan, an 83-year-old epidemiologist who won fame for combating the SARS epidemic in 2003, said in an interview with Reuters.

The optimism comes as the death toll from the epidemic climbed past 1,100 and the World Health Organization (WHO) warned of a "very grave threat for the rest of the world".

The WHO has named the disease caused by the virus as COVID-19, avoiding any animal or geographic designation to avoid stigmatization and to show the disease comes from a new coronavirus discovered in 2019.

Meanwhile, the U.S. Energy Information Administration (EIA) on Tuesday cut its global oil demand growth forecast for this year by 310,000 bpd as the virus outbreak crimps oil consumption in China.

"EIA expects that travel restrictions in response to the coronavirus, along with the related economic slowdown in China, will reduce petroleum demand and keep crude oil prices below $60 per barrel through the first half of this year despite current disruptions to crude oil supply," EIA Administrator Linda Capuano said.

The American Petroleum Institute (API) estimated on Tuesday a larger than anticipated crude oil inventory build of 6-million barrels for the week ended Feb. 7, compared to analyst expectations of a 3 million barrels build. Official EIA data will be out later in the day.