Published: Tue, March 24, 2020
Markets | By Otis Pena

Oil falls more than US$1 as coronavirus spreads

Oil falls more than US$1 as coronavirus spreads

Brent crude oil LCOc1 futures for May delivery rose by 62 cents, or 2.3%, to $27.65 a barrel by 0346 GMT while West Texas Intermediate (WTI) crude CLc1 futures gained 76 cents, or 3.3%, to $24.12.

Brent, the London-traded global benchmark for crude, settled Friday's trade down $1.49, or 5 percent, at $26.98.

The anticipated stimulus pushed the USA greenback decrease as it would enhance the money provide.

Accusing Russia, the United Arab Emirates and Saudi Arabia of using the environment of the worldwide spread of COVID-19 to "flood the market and cripple domestic energy producers", Senator Cramer wrote: "We will not be bullied". U.S. crude oil was trading around $22 a barrel on Monday, after tumbling 29% last week in its steepest slide since the outset of the U.S. -Iraq Gulf War in 1991.

The Energy Department official will work closely with U.S State Department officials in Riyadh and an existing energy attache for months at the least, the officials said on condition of anonymity and on not being quoted directly.

Concerns over oil demand were also stoked by a doubling of new coronavirus cases in China, the world's biggest oil importer, caused by a jump in infected travelers returning home from overseas.

They said to the extent that Russian Federation is involved in lifting Venezuelan oil, it will be sanctioned.

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Refining margins for gasoline and jet fuel have tanked because of decreased demand for transportation fuels, as the pandemic has forced businesses to close and governments to push residents to avoid travel and public places.

Many oil firms have rushed to reduce spending and some producers have already begun putting employees on leave.

The physical market at Cushing, Oklahoma, the delivery point for WTI futures signaled heavy oversupply with prices to roll positions forward to the next month sinking to the weakest in almost a decade.

Oil prices have dropped more than half in the last two weeks as Saudi Arabia and Russian Federation launched a price war and the coronavirus pandemic destroyed demand.

"Markets are beginning to price in recession scenarios as aggressive fiscal and monetary stimulus misfire", analysts at ING said in a note.

Swiss bank Julius Baer saw oil prices recovering to above $30 a barrel by mid-year, but added that they will likely continue to swing wildly in the very near term.

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