Reuters: Oil prices stabilize, set for weekly gain on hopes for supply cut

The Organization of the Petroleum Exporting Countries and its allied producers are considering cutting output by up to 2.3 million barrels per day.

Oil prices were steady on Friday, but set for their first weekly gain in six weeks on the assumption that major producers will implement deeper output cuts to offset slowing demand in China caused by the coronavirus epidemic.

Brent crude futures LCOc1 were 1 cent higher at $56.35 a barrel by 0439 GMT, after gaining 1% the previous session, Reuters said.

Brent is 3.4% higher for the week, the first increase since the week of January 10.

U.S. West Texas Intermediate (WTI) futures CLc1 were 4 cents higher at $51.46 a barrel. The contract rose 0.5% on Thursday and is now 2.2% higher for the week.

"Oil prices appear to have stabilized this week on optimism that OPEC+ will once again do whatever it takes to tighten output and on hope that the coronavirus peak is nearing," said Edward Moya, senior market analyst at OANDA in New York.

Crude prices have plunged about 20% from their 2020 peaks on January 8 as oversupply concerns combined with worries about large fuel demand declines in China as the country's quarantine to fight the coronavirus outbreak has stymied economic activity.

In response to the demand slump, the Organization of the Petroleum Exporting Countries (OPEC) and its allied producers, known as OPEC+, are considering cutting output by up to 2.3 million barrels per day.

The International Energy Agency (IEA) on Thursday said that first quarter 2020 oil demand is set to fall versus a year earlier for the first time since the financial crisis in 2009 because of the coronavirus outbreak in China.