Oil prices jumped $1 as recent sharp falls draw investors

By Seng Li Peng and Aaron Sheldrick
SINGAPORE, March 17 (Reuters) - Oil prices rose more than $1
on Tuesday as the recent sharp falls due to the coronavirus
pandemic encouraged bargain hunters to come forward, although
the market remains volatile as the spread of the infection
disrupts economies and hurts demand.
Brent crude LCOc1 was up by 1.5%, or 46 cents, to $30.51 a
barrel by 0206 GMT, after hitting a high of $31.25.
U.S. West Texas Intermediate (WTI) crude CLc1 rose 3.2%,
or 92 cents, to $29.62, having come off a high of $30.21.
"Presumably, the market is getting supported by physical
bargain hunters and short covering," said Stephen Innes, chief
markets strategist at AxiCorp.
The United States has said it will take advantage of low oil
prices to fill its Strategic Petroleum Reserve (SPR), and other
countries and companies are planning similar measures to fill
storage tanks.
"But those storage facilities are rapidly filling. If
storage does fill, quashing that demand, oil prices are sure to
collapse further, and the global markets will then have to hope
that the dispute between Saudi Arabia and Russia is resolved
before we reach that point of no return," Innes said.
Amid heavy demand loss from the global spread of the virus
that causes COVID-19, Saudi Arabia and Russia started a price
war after failing to agree to extend their pact to cut output to
support the market.
Saudi Aramco 2222.SE has said this week it would likely
carry over its planned higher oil output for April into the
following month, and that it was "very comfortable" with an oil
price of $30 a barrel.
Several countries - including the United States and Canada,
and nations in Europe and Asia - are taking unprecedented steps
to contain the virus, severely crippling demand for crude and
refined products such as gasoline and jet fuel.
Gasoline refining margins in the United States, the world's
largest gasoline consumer, plunged around 95% on Monday -
briefly turning negative - with fuel prices plunging faster than
crude oil in anticipation of coronavirus prevention measures
keeping people off the road and in their homes.