Oil Prices Climb Higher on U.S. Stimulus Hopes
Oil prices rose on Wednesday morning trade on the hope that the U.S. will soon unleash a US$2.5 trillion stimulus package to combat the economic fallout of the Coronavirus epidemic. The U.S. Federal Reserve also announced an array of programs at the start of this week geared towards supporting the U.S. economy by boosting liquidity and cash supply to prevent a freezing up of credit markets.
Brent crude futures for May delivery rose to just over US$28 per barrel in early trade on Wednesday, while WTI crude futures were trading at around US$24.30 per barrel. The uptick in oil prices was further aided by a weakening of the U.S. Dollar, with the Dollar Index dropping approximately 0.6% on Tuesday.
The demand outlook for oil during 2020, however, remains weak as travel restrictions and national lockdowns likely result in a protracted global recession over the next year and beyond.