Trump says he will be taking major steps to gird US economy against the impact of spreading coronavirus. PHOTO: REUTERS
US President Donald Trump on Monday said he will be taking "major" steps to gird the US economy against the impact of the spreading coronavirus, while Japan's government plans to spend more than $4 billion in a second package of steps to cope with the virus.
Brent crude futures were up $3.36, nearly 10%, to $37.72 a barrel by 1041 GMT, after hitting a session high of $37.75 a barrel.
West Texas Intermediate (WTI) crude gained $3.14, or around 10%, to $34.27 a barrel, after hitting a high of $34.42.
Both benchmarks plunged 25% on Monday, dropping to their lowest levels since February 2016 and recording their biggest one-day percentage declines since January 17, 1991, when oil prices fell at the outset of the first Gulf War.
Trading volumes in the front-month for both contracts hit record highs in the previous session after three years of cooperation between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on Friday, triggering a price war for market share.
Saudi Arabia the world's biggest oil exporter, escalated tensions with plans to supply 12.3 million barrels per day (bpd) in April, well above current production levels of 9.7 million bpd, Saudi Aramco CEO Amin Nasser said on Tuesday.
April's crude supply will be "300,000 barrels per day over the company's maximum sustained capacity of 12 million bpd," Nasser said in a statement received by Reuters.
Prices pared gains by over $1 on the news.
Russian Oil Minister Alexander Novak said he did not rule out joint measures with OPEC to stabilise the market, adding that the next OPEC+ meeting was planned for May-June.
But in response, Saudi Arabia's energy minister told Reuters he did not see a need to hold an OPEC+ meeting in May-June if there was no agreement on what measures should be taken to deal with the impact of the coronavirus on oil demand and prices.
"I fail to see the wisdom for holding meetings in May-June that would only demonstrate our failure in attending to what we should have done in a crisis like this and taking the necessary measures," Prince Abdulaziz bin Salman said.
"Price wars and pandemics are nothing new to the commodity markets, but both occurring simultaneously is something we have yet to witness in our careers," RBC analysts said in a note. "Such action will test the market's self-balancing mechanism absent the backstop of OPEC, a mechanism that has not been tested since the US shale boom was in its infancy," they added.
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