Oil Prices Recover After Worst Weekly Performance in Over a Decade
Oil prices recovered on Monday after their worst weekly performance since the 2008 financial crisis. Brent crude futures for May delivery were trading at close to US$53 per barrel early on Tuesday, having dipped below the US$50 mark at the end of last week, which saw financial and commodity markets reel from panic selling driven by the Coronavirus outbreak. WTI crude futures for April delivery had recovered to over US$48 per barrel after dropping below the US$45 mark on Friday. Equity markets also rallied on Monday as central banks around the world pledged to take steps to soften the economic impact of the spreading epidemic, with a coordinated policy response and interest rate cuts now widely anticipated.
Oil prices were further buoyed by indications that the OPEC+ group of producers is likely to announce further output cuts at a scheduled meeting in Vienna later this week, even as Russian energy minister Alexander Novak told reporters on Monday that he is still evaluating the proposed 600,000 barrel per day production cut suggested by OPEC’s technical committee in February. However, data on oil production and exports from Russia indicate that demand for its crude from Asian buyers remained steady during February despite the virus outbreak, which is likely to diminish Russian support for any further OPEC-led moves to cut production.