Oil rises for second day amid hopes for output cut by U.S. producers
Oil prices climbed for a second day on Wednesday, lifted by hopes that U.S. producers will cut output, but gains were limited compared with Monday’s crash after Saudi Arabia and Russia triggered a price war.
Brent crude futures rose $1.38, or 3.7%, to $38.60 a barrel by 0126 GMT, while U.S. West Texas Intermediate (WTI) crude gained $0.97, or 2.8%, to $35.33 a barrel, following a jump of over 8% the previous day.
“Expectations that U.S. shale oil producers will need to trim output helped improve the market sentiment,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.
Oil and equity markets had staged solid rebounds on Tuesday after the previous day’s pummeling, with signs of co-ordinated action by the world’s biggest economies to cushion the economic impact of the coronavirus epidemic helping pull investors out of panic mode.
Still, “the rebound in crude oil is not expected to last long, with Saudi Arabia and Russia boasting about how much they can boost output by as the battle for market share begins,” ANZ said in a note.
Saudi Arabia said on Tuesday it would boost its oil supplies to a record high in April, raising the stakes in a standoff with Russia and effectively rebuffing a suggestion from Moscow for new talks on production levels.