Oil prices jumped on Friday following a week of sharp losses, as the World Health Organisation travel and trade restrictions against China were not necessary amid the coronavirus outbreak.
Oil prices had fallen nearly 4 per cent through to Thursday this week - hitting three-months lows - before rebounding on Friday, with investors and traders worried over how the spreading virus would impact demand for oil and its products.
"The WHO declared a global health emergency but more importantly said travel and trade restrictions were not necessary," said Edward Moya, senior market analyst at Oanda in New York.
Brent crude, the most widely-used benchmark, jumped 90 cents to $59.19 a barrel, while the US West Texas Intermediate (WTI) climbed $1.03 to reach $53.17 a barrel.
The WHO on Thursday declared that the coronavirus outbreak in China - which has killed more than 200 people there and has spread to some 18 countries - now constitutes a public health emergency of international concern.
Despite the WHO announcement and the rebound in prices on Friday, analysts remained cautious and warned of further downside risks if the virus continues to spread.
"Oil's January correction, a 13 per cent drop to be exact, was ripe for a bounce," said Mr Moya.
"Oil is likely to remain vulnerable here despite today's optimism that the coronavirus has likely been contained."
Coronavirus and air traffic
Italy's government decided to close all air traffic between Italy and China, and airlines including Air France, American Airlines and British Airways have stopped flying to Chinese cities.
The UAE-based Etihad Airways said they are continuing to operate all flights to China.
“Etihad Airways is continuing to operate all flights to mainland China and Hong Kong as normal, as there are no travel or trade restrictions by the relevant authorities,” an Etihad spokesman said.
Oil Prices were also buoyed by reports that Saudi Arabia has opened a discussion about moving an upcoming output policy meeting to early February from March following the recent slide in oil prices.
"We calculate that demand could be hit by 500,000 barrels per day as China curbs outbound tourism, and international carriers halt flights," said ANZ Bank in a note on Friday.