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Oil Prices Recover 8% under
Economic Stimulus Anticipations and Slowdown in Coronavirus Outbreak
10 March 2020
Oil prices rose 8% yesterday to
recover from the biggest loss recorded in one day over nearly 30 years.
This rise comes at the time investors anticipate a probable economic
stimulus under a war prices between Russia and Saudi Arabia concurrently
with a slowdown in coronavirus new infections in China.
US President Donald Trump said
on Monday that he would take "significant" steps to support the US
economy in the face of the impact of the Corona Virus outbreak and would
consider salary tax cuts with Republican lawmakers in Congress on
Tuesday.
Brent crude futures rose at
06:05 GMT by USD 2.85 (8.3%) to settle at USD 37.21 per barrel, while US
West Texas crude futures gained USD 2.46 (7.9%) to settle at USD 33.59 a
barrel. Both benchmark crudes have fallen on Monday to their lowest
levels since Feb 2016 recording the biggest declines percentage-wise in
one day since 17 Jan 1991 when oil prices collapsed at the breakout of
the 1st Gulf War.
Trading volumes in the nearest
contract maturity for both crudes record levels in the previous session
following the collapse of a pact lasted for three years between Saudi
and Russia and other two big producers to initiate major cuts of the
supply on Friday.
Asian stocks and bonds’ yields
also rose from historical low levels under forecasts of a coordinated
stimulus by central banks and governments around the world to cool the
selling conditions by the panic-struck investors.
Investors’ sentiments also
received another forward push following the visit of the Chinese
President Xi Jinping to Wuhan the epicenter of the outbreak of
coronavirus for the first time since the start of the epidemic and at
the time the outbreak of the virus outbreak has slowed sharply in the
Chinese mainland for the first time.