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Oil rockets nearly 20% as investors hail coronavirus stimulus spending - for now

Published 19/03/2020, 01:55
© Reuters.
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By Aaron Sheldrick
TOKYO, March 19 (Reuters) - Oil prices surged as much as
nearly 20% on Thursday, bouncing back from days of heavy losses
in a relief rally that may yet be short-lived, analysts warned,
but which was stoked by economic stimulus efforts to ward off a
global coronavirus recession.
Brent crude LCOc1 was up $2.10, or 8%, at $26.98 a barrel
by 0028 GMT after tumbling 13% on Wednesday in a third day of
relentless selling. U.S. oil CLc1 gained $3.44, or 17%, to
$23.81 a barrel after slumping nearly 25% in the previous
session.
"After a 24% crash, oil prices are firming up on some
selling exhaustion and as U.S. and European leaders unleash ...
aid and stimulus," said Edward Moya, senior market analyst at
OANDA in New York.
In the latest move by a central bank to try to halt the
spiralling economic and financial crisis sparked by the
coronavirus epidemic, the European Central Bank kicked off a 750
billion euro ($820 billion) emergency bond purchase scheme after
an unscheduled meeting on Wednesday. Still, the spread of coronavirus showing no sign of abating.
Countries on every continent have resorted to drastic lockdowns,
steps to try to tame a virus that has now infected more than
200,000 people worldwide, killing more than 8,000, with a major
global recession in prospect. OANDA's Moya cautioned that the selling could start again in
oil markets.
"A bottom for oil is not in place, but we could finally see
some stabilisation if financial markets can maintain a somewhat
constructive tone with all the stimulus that is about to hit,"
he said.

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