Oil surges up after 3 days plunge but coronavirus restraints gains

Publisher: The Insight Partners

Oil prices rose nearly 3% on Thursday after a three-day selloff sparked by the spread of the coronavirus and a market share battle between Saudi Arabia and Russia drove them to their lowest in almost two decades.

Benchmark Brent, which has lost half its value in less than two weeks, got some respite as investors across financial markets assessed the impact of massive central bank stimulus measures.

Brent crude LCOc1 was up 72 cents, or 3%, to $25.60 a barrel by 1225 GMT, after plunging to $24.52 on Wednesday, its lowest level since 2003.

West Texas Intermediate (WTI) crude CLc1 gained $1.57, or 7.8%, to $21.94 after dropping nearly 25% in the previous session to an 18-year low.

But analysts said gains were likely to be temporary, as tumbling demand was compounded by the collapse this month of a deal between OPEC, Russia and others to curb supply.

Saudi Arabia, de facto leader of OPEC, has since kicked off a price war with Russia as it plans to increase supply to a record-high 12.3 million barrels per day (bpd) for months.

The drop in demand, particularly in transportation, is also leading to a rapidly growing glut in refined products such as jet fuel and gasoline.

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