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Oil prices recover ground after market turmoil fuels price plunge

Published 22/04/2020, 02:29
© Reuters.
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TOKYO, April 22 (Reuters) - Oil prices found some respite on
Wednesday as U.S. oil futures rose more than 20% and Brent
prices steadied after a two-day price plunge, as markets
struggle with a massive crude glut amid the coronavirus
outbreak.
After falling into negative territory for the first time in
history amid record trading volumes, U.S. crude futures rose 20%
as contracts for May delivery expired and the June contract
became the front month.
West Texas Intermediate CLc1 was up $2.05, or 18%, at
$13.62 a barrel by 0034 GMT. Brent crude LCOc1 , which settled down 24% in the previous
session, was up 4 cents at $19.37 a barrel after rising more
than $1 earlier.
"Global markets are struggling mightily with a temporary but
overwhelming demand drop due to the coronavirus pandemic," said
Stephen Innes, global markets strategist at AxiCorp, warning
that prices could tumble further as storage fills up.
Oil prices have slumped over 70% this year as the
coronavirus has slashed demand for everything from jet fuel to
gasoline, while storage tanks around the globe are filling
rapidly.
The volatity in the oil market has prompted CME Group, the
world's biggest commodities exchange, to raise margins on crude
oil futures. Giving some support to prices, the U.S. Senate on Tuesday
approved nearly $500 billion in added support for the U.S.
economy and hospitals and will send the measure to the House of
Representatives for final passage later this week.

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