Oil Prices Rebound Strongly but Languish Near 18-Year Lows

In New York on Monday, prices struck their lowest levels since 2002, with WTI briefly falling below $20

Oil prices clawed back some ground in Asian trade Tuesday after falling to 18-year lows, as the coronavirus pandemic brings economies worldwide to a standstill and throttles demand.

US benchmark West Texas Intermediate rose 2.9 percent to just over $20 a barrel while Brent crude, the international benchmark, was up 0.5 percent at nearly $23 a barrel.

In New York on Monday, prices struck their lowest levels since 2002, with WTI briefly falling below $20.

Oil markets have plunged as governments across the planet introduce lockdowns to stem the spread of the virus, hammering demand for the commodity.

About two-fifths of the globe's population have now been confined to their homes, while the death toll has soared over 37,000, with the US suffering a serious and escalating outbreak.

The crisis has been worsened after top producers Saudi Arabia and Russia launched a price war following a row about reducing output to support virus-hit energy markets.

In its latest move to win market share, Riyadh announced Monday it would raise exports by 600,000 barrels per day to a record 10.6 million barrels per day in May.

And there are warnings that oil could sink even further as storage tanks around the world approach full capacity.

But markets enjoyed some relief Tuesday as traders bought at bargain prices, and following a phone call Monday between US President Donald Trump and Russian counterpart Vladimir Putin where they discussed oil prices with US producers reeling.

Stephen Innes, AxiCorp chief global market strategist, said Trump's call may have been an "attempt to get Russia to pull up a chair to the negotiating table with Saudi Arabia, or maybe even (looking at) loosening sanctions on Russia, as desperate times call for drastic solutions".

He said any sign of Moscow and Riyadh putting aside their differences would be positive but added that the market "is not entirely buying into it".

(Except for the headline, this story has not been edited by Scrabbl staff and is published from a syndicated feed.)