ZCZC
BCN-01
OIL-ENERGY-MARKET
Oil prices rebound strongly from 18-year lows
SINGAPORE, March 31, 2020 (BSS/AFP) – Oil prices rebounded strongly in
Asian trade Tuesday a day after falling to 18-year lows, as investors took
heart from moves by policymakers to support the coronavirus-hit global
economy.
US benchmark West Texas Intermediate jumped 7.3 percent to $21.5 a barrel
while Brent crude, the international benchmark, was up 3.3 percent at $23.5 a
barrel.
In New York on Monday, prices struck their lowest levels since 2002, with
WTI briefly falling below $20.
Oil markets have plunged as governments across the planet introduce
lockdowns to stem the spread of the virus, hammering demand for the
commodity.
About two-fifths of the globe’s population have now been confined to their
homes, while the death toll has soared over 37,000, with the US suffering a
serious and escalating outbreak.
The crisis has been worsened after top producers Saudi Arabia and Russia
launched a price war following a row about reducing output to support virus-
hit energy markets.
In its latest move to win market share, Riyadh announced Monday it would
raise exports by 600,000 barrels per day to a record 10.6 million barrels per
day in May.
But prices rebounded strongly Tuesday as investors bought at bargain prices
and focused on stimulus measures rolled out by governments worldwide to
support the virus-ravaged global economy, including a $2-trillion package in
the US.
Markets were also buoyed by a phone call Monday between US President Donald
Trump and Russian counterpart Vladimir Putin where they discussed oil prices.
Stephen Innes, AxiCorp chief global market strategist, said Trump’s call
may have been an “attempt to get Russia to pull up a chair to the negotiating
table with Saudi Arabia, or maybe even (looking at) loosening sanctions on
Russia, as desperate times call for drastic solutions”.
He said any sign of Moscow and Riyadh putting aside their differences would
be positive but added that the market “is not entirely buying into it”.
There have also been warnings that oil could sink even further as storage
tanks around the world approach full capacity.
BSS/AFP/GMR/0948 hrs