Oil yesterday rebounded strongly in Asian trade on hopes for a US intervention to end a Saudi Arabia-Russia price dispute amid the coronavirus pandemic.
However, analysts said that the market remained hobbled by low demand because of business shutdowns, the grounding of air travel and other social distancing measures put in place to contain the outbreak.
In afternoon Asian trade, US benchmark West Texas Intermediate (WTI) was trading 7.14 percent higher at US$21.76 a barrel.
International benchmark Brent crude advanced 8.21 percent to US$26.77 a barrel.
Both benchmarks on Monday fell to their lowest levels in 18 years, with WTI briefly dipping below US$20 a barrel.
“Oil prices are higher on news that [US] President [Donald] Trump will hold a round table discussion with the country’s top oil executives,” AxiCorp Financial Services Pty global market strategist Stephen Innes said.
The meeting is “presumably to discuss possible coordinated production curtailment measures in an attempt to buy some time for the struggling US shale industry,” he said in a note.
Innes said that Trump’s “acknowledging of the problems in the oil patch is critical” as he could be instrumental in resolving the price war that has led to the supply glut.
Phillip Futures Ltd in Singapore said oil prices were also supported by “reports that Russia does not want to boost its crude oil production in the current environment” and traders expecting US shale producers to “come under pressure to cut production.”
Australia and New Zealand Banking Group (ANZ) said that US crude prices were also being bolstered by reports that the US energy department might rent space in the country’s emergency oil reserves to local producers.
“This would help drillers store excess crude,” ANZ said.
Saudi Arabia, the world’s biggest crude exporter, on Wednesday ramped up its price war with Russia, boosting crude oil supply to record levels.
Saudi Arabian Oil Co (Aramco) offered 18.8 million barrels on a single day, despite pressure from Washington.
Oil also surged as China planned to start buying up cheap crude for its strategic reserves, adding to tentative signs of growing risk appetite across financial markets that is propelling prices higher.
Futures extended gains as Beijing instructed government agencies to start filling state stockpiles after oil plunged 66 percent over the first three months of the year.
Dated Brent, the benchmark for two-thirds of the world’s physical supply, was assessed at US$15.135 on Wednesday, the lowest since at least 1999. Crude has slipped below US$10 in some areas including Canada and shale regions in the US, while some grades have posted negative prices.
China’s purchases are likely to help soak up some excess oil as the market faces an unprecedented collapse in consumption.
Top trader Vitol SA said demand would be destroyed by as much as 30 million barrels a day this month.
In addition to state-owned reserves, Beijing might use commercial space for storage, while also encouraging companies to fill their own tanks, people with knowledge of the matter said.
The initial target is to hold government stockpiles equivalent to 90 days of net imports, which could eventually be expanded to as much as 180 days when including commercial reserves.
“The oil price roller coaster hasn’t stopped,” Vanda Insights founder Vandana Hari said. “Any sense of stabilization is likely to prove fleeting until we’re past the coronavirus peak in the US and worst-hit countries of Europe.”
Additional reporting by Bloomberg
It was late morning and steam was rising from water tanks atop the colorful, but opaque-windowed, “soapland” sex parlors in a historic Tokyo red-light district. Walking through the narrow streets, camera in hand, was Beniko — a former sex worker who is trying to capture the spirit of the area once known as Yoshiwara through photography. “People often talk about this neighborhood having a ‘bad history,’” said Beniko, who goes by her nickname. “But the truth is that through the years people have lived here, made a life here, sometimes struggled to survive. I want to share that reality.” In its mid-17th to
‘MAKE OR BREAK’: Nvidia shares remain down more than 9 percent, but investors are hoping CEO Jensen Huang’s speech can stave off fears that the sales boom is peaking Shares in Nvidia Corp’s Taiwanese suppliers mostly closed higher yesterday on hopes that the US artificial intelligence (AI) chip designer would showcase next-generation technologies at its annual AI conference slated to open later in the day. The GPU Technology Conference (GTC) in California is to feature developers, engineers, researchers, inventors and information technology professionals, and would focus on AI, computer graphics, data science, machine learning and autonomous machines. The event comes at a make-or-break moment for the firm, as it heads into the next few quarters, with Nvidia CEO Jensen Huang’s (黃仁勳) keynote speech today seen as having the ability to
NEXT GENERATION: The company also showcased automated machines, including a nursing robot called Nurabot, which is to enter service at a Taichung hospital this year Hon Hai Precision Industry Co (鴻海精密) expects server revenue to exceed its iPhone revenue within two years, with the possibility of achieving this goal as early as this year, chairman Young Liu (劉揚偉) said on Tuesday at Nvidia Corp’s annual technology conference in San Jose, California. AI would be the primary focus this year for the company, also known as Foxconn Technology Group (富士康科技集團), as rapidly advancing AI applications are driving up demand for AI servers, Liu said. The production and shipment of Nvidia’s GB200 chips and the anticipated launch of GB300 chips in the second half of the year would propel
State-run CPC Corp, Taiwan (CPC, 台灣中油) yesterday signed a letter of intent with Alaska Gasline Development Corp (AGDC), expressing an interest to buy liquefied natural gas (LNG) and invest in the latter’s Alaska LNG project, the Ministry of Economic Affairs said in a statement. Under the agreement, CPC is to participate in the project’s upstream gas investment to secure stable energy resources for Taiwan, the ministry said. The Alaska LNG project is jointly promoted by AGDC and major developer Glenfarne Group LLC, as Alaska plans to export up to 20 million tonnes of LNG annually from 2031. It involves constructing an 1,290km
RSS