Fundamental Comment

Oil continues to recover after stimulus measures and Trump hint

oil recover

Oil continued its gains during Friday's trading set for another heavy loss this week, following significant gains in the previous session, as a result of stimulus measures and the US president's hint of intervention to reduce the price war between Russia and Saudi Arabia.

As of 11:02 GMT, West Texas Intermediate (WTI) crude futures traded at $26.99 per barrel, while the highest level recorded during the session was at 28.22.

The oil gains come as the European Central Bank announces that it has launched an emergency €750 billion bond purchase program as a stimulus response to support economic strikes caused by the Coved-19 outbreak.

 

The Federal Reserve also announced the expansion of the currency exchange program in order to solve the crisis of the dollar break.

 

Bank of England also decided to cut interest rates and strengthen asset purchases after an emergency meeting, in light of the efforts of central banks to support the economy exhausted by the coronavirus.

 

Some reports suggest that the Trump administration is considering intervening to curb the price war between Saudi Arabia and Russia by urging Saudi Arabia to cut supplies and use a threat of sanctions against Russia to force it to limit production.

 

Black gold lost about 24 percent during Wednesday’s trading, amid gains from the US dollar as well as supply and demand concerns due to the "Covid-19" binary virus and the price war between OPEC and Russia.

 

U.S. Energy Information Administration data yesterday showed US oil inventories rose below expectations over the past week, and U.S. crude production rebounded to an all-time high.

 

Regarding Coved-19 developments, the number of cases worldwide has reached more than 244,000, and 10,000 people have died globally.

 

Meanwhile, the dollar index, which measures the performance of six major currencies against the US dollar, slumped by 1.50 percent at 102.03.

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