Oil prices were mixed on possible stimulus benefits hopes to limit the economic fallout from the coronavirus (Covid-19) pandemic.
Fears that the pandemic will destroy demand for oil also contributed to mixed oil prices.
According to Reuters, Brent crude futures were down by $0.39 to $25.95 a barrel. Meanwhile, US West Texas Intermediate (WTI) crude futures increased by $0.12 to $22.72 per barrel.
The news agency quoted Commerzbank analyst Eugen Weinberg as saying: “Unlike the financial markets, the oil market is apparently finding it difficult to look beyond the current crisis.”
Furthermore, leaders of the Group of 20 major economies pledged to inject $5trn in fiscal spending into the global economy to reduce the economic impact of the coronavirus outbreak.
The collapse of a supply cut agreement proposed by the Organization of the Petroleum Exporting Countries (OPEC) earlier his month further led to a drop in oil prices.
This led to a price war between Saudi Arabia and Russia. The countries have both increased oil production, leading to over-production suppressing oil prices.
Russia sovereign wealth fund head Kirill Dmitriev told Reuters that a new OPEC+ deal to balance oil market might be possible if other countries are interested to join.
ING analyst Warren Patterson said: “It does not seem as though there is anything the Saudis or the broader OPEC+ group can do to push the market significantly higher.
“The demand destruction we are seeing does mean the level of cuts that would be needed by the group would be just too much to stomach.”
Global deaths from Covid-19 virus have crossed 22,077 while the confirmed cases stand at 488,161. About 117,677 are reported to have recovered from the virus. The global recovery rate currently stands at 45.33%.
It is now estimated that around 20% of the world’s population is under lockdown.
Confirmed coronavirus cases in the US increased significantly in the third week of March, currently making the country the most affected country in the world.
Meanwhile, epidemiologists from GlobalData conducted a three-scenario forecast model of Covid-19 transmission in the US, with a moderate estimate projecting more than 228,500 cases by 31 March.