While Russia and the Saudis are set to swamp the market with crude, the Kremlin said it would prefer higher prices after Iraq, OPEC’s second-biggest producer, urged the cartel and its former allies to convene a meeting to consider steps to re-balance the market.
While Russia and the Saudis are set to swamp the market with crude, the Kremlin said it would prefer higher prices after Iraq, OPEC’s second-biggest producer, urged the cartel and its former allies to convene a meeting to consider steps to re-balance the market.

Oil rollercoaster has crude rebounding after drop to 18-year low

Futures rose as much as 18% in New York, the most since December 2008, following a 24% rout in the previous session

Oil rebounded in early Asian trading after plunging to the lowest level in 18 years as the market grapples with a double whammy of collapsing demand and an impending supply flood.

Futures rose as much as 18% in New York, the most since December 2008, following a 24% rout in the previous session. The European Central Bank has unleashed an emergency bond-buying program as policy makers around the world take steps to strengthen their economies against the impact of the coronavirus, which has curbed travel and closed entire regions across the globe.

While Russia and the Saudis are set to swamp the market with crude, the Kremlin said it would prefer higher prices after Iraq, OPEC’s second-biggest producer, urged the cartel and its former allies to convene a meeting to consider steps to re-balance the market.

“There is just extreme volatility in the market now as participants try to assess the economic impact of the coronavirus and what it means for oil demand," said Daniel Hynes, an analyst at Australia & New Zealand Banking Group Ltd. in Sydney. “The high level of uncertainty around the hit to demand means that markets are going to continue to test these levels and invite some sort of reaction from producers."

The global spread of the virus pandemic continues to gather pace, with the number of confirmed cases in Europe now exceeding China. Italy’s death count has surged to almost 3,000, while the U.K. imposed tighter controls on movement including closing all schools.

As the world’s biggest oil producers move to ramp up production and exports, U.S. Republican Senator Kevin Cramer called on President Donald Trump to ban crude imports from Russia, Saudi Arabia and other OPEC members in response to recent action taken by them to “distort energy markets" when demand is already weak. The kingdom has ordered state-run Aramco to keep output at 12.3 million barrels a day over the coming months.

West Texas Intermediate for April delivery climbed $2.50 to $22.87 a barrel on the New York Mercantile Exchange as of 8:52 a.m. in Singapore after closing at $20.37 on Wednesday, the lowest since February 2002. Brent for May delivery added 6.5% to $26.49 on London’s ICE Futures Europe exchange after settling at the lowest since May 2003.

WTI’s move on Thursday would make it the fifth double-digit increase or decrease this month if it lasts until settlement. That would be the most since there were six such jumps in January 1991, during Gulf War.

This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.

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