Oil prices increased for a second consecutive day on Wednesday, as investors hope for production cuts by US oil suppliers.
However, gains were still significantly smaller than losses in Monday’s oil price crash. This was caused by the outbreak of an oil price war between Saudi Arabia and Russia, which has not yet been resolved.
According to Reuters, Brent crude futures rose $1.26, or 3.4%, to $38.48 a barrel. West Texas Intermediate (WTI) crude oil gained $0.91, or 2.7%, increasing to $35.27 per barrel.
Industry group American Petroleum Institute (API) reported a rise in the US crude stockpiles. Meanwhile, gasoline and distillate stocks fell.
Rakuten Securities commodity analyst Satoru Yoshida was quoted by the news agency as saying: “Expectations that US shale oil producers will need to trim output helped improve the market sentiment.”
In a note, ANZ said: “The rebound in crude oil is not expected to last long, with Saudi and Russia boasting about how much they can boost output by as the battle for market share begins.”
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After Russia refused a supply cut deal, crude oil prices declined to their lowest levels in more than three years. Becuase of this Shale producers in the US have slashed spending cuts, with Occidental Petroleum recently joining them.
Response to coronavirus
Asian shares fell this morning over growing scepticism about Washington’s stimulus package to fight the coronavirus Covid-19 outbreak.
Meanwhile, the death toll from the virus has increased to more than 4,200 as of the end of 11 March.
The recoveries have increased to about 65,000, while the total confirmed cases worldwide have passed 119,000.
Italian authorities announced that the cases in Italy have increased to 9,172 with 463 deaths in the country, while recoveries have increased to 724. On Monday, the Italian prime minister announced a lockdown across the country to help contain the threat.
To address coronavirus Covid-19, the World Health Organization (WHO) has published research and development (R&D) roadmap.