Oil prices rebound 6% after rout, but outlook volatile

SINGAPORE (Reuters) - Oil prices bounced around 6% on Tuesday, but analysts saw little chance of a major recovery from the biggest daily rout in nearly 30 years after top producers Saudi Arabia and Russia launched a price war.

Crude was supported by hopes for a settlement and potential U.S. output cuts, but gains could be short-lived as oil demand continues to be hit by the economic impact of the coronavirus outbreak.

Brent crude futures rose $2.36, or 6.9%, to $36.72 a barrel by 0307 GMT, while U.S. West Texas Intermediate (WTI) crude gained $1.87, or 6%, to $33.00 a barrel.

Both benchmarks plunged 25% on Monday, dropping to their lowest since February 2016 and recording their biggest one-day percentage declines since Jan. 17, 1991, when oil prices fell at the outset of the U.S. Gulf War.

Trading volumes in the front-month for both contracts hit record highs in the previous session after a three-year pact between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on Friday.

“Oil prices are tentatively finding support as global bond yields have finally started to stabilize. A short-term bottom may be in place for now, but low oil prices are here to stay,” said Edward Moya, senior market analyst at broker OANDA.

“Oil’s rally right now will likely be short-lived as the drivers for both the supply and demand side will remain bearish for now.”

Saudi Arabia plans to boost its crude output above 10 million barrels per day (bpd) in April from 9.7 million bpd in recent months, two sources told Reuters on Sunday. The kingdom slashed its export prices at the weekend to encourage refiners to buy more.

Russia, one of the world’s top producers alongside Saudi Arabia and the United States, also said it could lift output and that it could cope with low oil prices for six to 10 years.

U.S. shale producers rushed to deepen spending cuts and could reduce production after OPEC’s decision to pump full bore into a global market hit by shrinking demand due to the coronavirus outbreak.

“When you look at the leverage the industry is in, at prices of around $30, it’s not profitable,” said Jonathan Barratt, chief investment officer Probis Group.

“Saudis and other Middle Eastern producers have their budgetary constraints, Russia is starved for cash and the breakeven for .. shale has to be around $50 a barrel. So the dynamics of all those put together will mean they will come to an agreement somewhere.”

On the demand side, the International Energy Agency said oil demand was set to contract in 2020 for the first time since 2009. The agency cut its annual forecast and said that demand would contract by 90,000 bpd in 2020 from 2019.

Energy stock prices also fell sharply on Monday, and shale producers began cutting spending in anticipation of lower revenues.

Comments

European Union will close its borders to all non-essential travel to fight coronavirus

Madrid (ITNTV) The European Union will close its borders to all non-essential travel as it attempts to contain the ongoing spread of the coronavirus on the continent. "The less travel, the more we can contain the virus," European Commission President Ursula von der Leyen said Monday following a video conference between G7 leaders. She appeared confident that the European Council would sign off on the restriction in a Tuesday vote. The bloc's member states imposed aggressive measures on Monday, days after the World Health Organization (WHO) said Europe was at the epicenter of the pandemic. French President Emmanuel Macron declared "war" on the virus during a national address on Monday, banning all social events across the country -- including family gatherings. Macron said those who have gathered in public places in recent days have not been respecting previous measures to limit the outbreak's spread in France, which as of Monday had 5,380 con...

PhD positions: In Institute of Biochemistry, Jena University Hospital - Friedrich Schiller University Jena, Germany

PhD positions: In Institute of Biochemistry, Jena University Hospital - Friedrich Schiller University Jena, Germany 🇩🇪 . Subjects: Neurobiology / Imaging Description: 1 PhD position in Neurobiology / Imaging Prof. Britta Qualmann, Inst. of Biochem. I, UKJ - Friedrich Schiller University Jena, Germany Prof. Christian Geis, Section of Translat. Neuroimmunol., Dept. Neurol., UKJ We seek for a productive addition to our research team in a collaborative project. We plan to study pathomechanisms of synaptic changes underlying autoimmune disorders of the central nervous system applying super-resolution microscopy. The Geis lab examines immune-mediated changes of synapses by interactions with pathogenic human antibodies against neuronal proteins. Short- and long-term effects on neuronal networks are analyzed using electrophysiological and various microscopy methods. The Qualmann lab is an internationally well-known lab that focusses on proteins with the power to s...

80 pct of life stopped in Turkey due to outbreak, says interior minister

Turkish citizens, especially those living in metropolises, have been abiding by the “social isolation” principles laid out by the government, Interior Minister Süleyman Soylu has said, adding that almost 80 percent of life “stopped” in Turkey . “Up until now, just our ministry issued 38 circulars, 17 of which concern the borders. Many high-level precautions have been taken. Right now, 80 percent of life stopped in Turkey,” Soylu said on March 26 in an interview with a private broadcaster. Soylu also provided updated figures for passenger traffic. He said that there is a 73 percent decline in inter-city bus services, adding that these services can also be suspended if needed. On intra-city traffic, Soylu said that there has been an 80 percent decline. This figure was 65 percent according to another interview the minister held on March 25. The government has four cruxes it predicates on when taking measures against the spread of the novel coronaviru...

Infotainment News TV

Search This Blog