Oil rally as expectations of stimulus measures from the Fed
The crude oil futures contract flourishes on Monday (23/03), but spent most of the time intraday fluctuation, while investors pay attention to another round of monetary stimulus from the US Federal Reserve System (Fed) and the ability to boost the economy and the energy needs of this measure, MarketWatch reported.
Oil rose even as the world’s limited water activities more stringent in order to slow the spread of pandemic COVID-19 and the US Senate can not reach agreement on the US bailout.
“The optimism from the Fed to provide support for oil on Monday,” Phil Flynn, analyst at market-level Price Futures Group, said.
On Monday, the Fed announced would buy unlimited amounts of government bonds and other US securities secured by collateral to support the operation of the financial markets.
“That ultimately will support oil demand, and we are seeing China started to buy oil,” Mr Flynn said.
Ending the trading session on Monday, light sweet crude contract for WTI Nymex delivery in May on soaring 73 cents (or 3.2%) to 23.36 USD / barrel. This contract continuous fluctuation in the session Monday.
July Brent crude contract on the London Metal Exchange inched 5 5 cents (or 0.2%) to 27.03 USD / barrel.
However, the global demand slump due to the impact of the pandemic COVID-19 combined with prospects for oil production increased by war oil prices Russia – Saudi Arabia has made Brent prices plummeted to 46.5% and WTI oil slid nearly 48% since the beginning of this month so far.
“Oil clearly can not escape this pressure, the travel restrictions more stringent will affect global demand,” the analysts at ING said.
Louisiana, Delaware and Ohio are the latest states require people at home in an effort to prevent the spread COVID-19.
A support package worth US $ 1.3 trillion Republican faced a hurdle in the US Senate on Sunday night (22/03), with the Democratic Party MPs blocked by the estate measures Council on measures to aid businesses and workers.
Also during the session on Monday, the gas delivery contract in April fell nearly 32% to 41.18 cents / gallon. Meanwhile, heating oil contract delivery in April advanced 1% to 1.0161 dollars / gallon.
Natural gas delivery contract down 0.1% in April to 1,602 USD / MMBTU.