Oil prices jumped on Friday following sharp losses this week, as the World Health Organization (WHO) came out against travel and trade restrictions in declaring a global emergency over the spread of the coronavirus that originated in China last year.
Oil prices had fallen nearly 4% through 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 futures jumped 90 cents to $59.19 a barrel by 0243 GMT, after falling 2.5% the previous session. Brent is still down 2.5% for the week.
U.S. West Texas Intermediate (WTI) futures were up by $1.03 to $53.17 a barrel. The contract fell 2.2% on Thursday and is now 1.9% lower for the week.
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% drop to be exact, was ripe for a bounce," said Moya.
"Oil is likely to remain vulnerable here despite today's optimism that the coronavirus has likely been contained."
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.
"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.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.