Crude Oil Sustains Gain as OPEC Likely Cuts Upset Coronavirus

• Crude Oil Sustains Gain as OPEC Likely Cuts Upset Coronavirus

Global oil prices on Tuesday sustained gains as investors are predicting that the Organisation of the Petroleum Exporting Countries (OPEC) will make a deeper cut to boost falling crude oil prices and also that central banks will deploy financial stimulus to curtail global slow down caused by the fast-spreading coronavirus.

Brent crude oil, against which Nigerian oil is measured, gained $3.72 from $49.55 it was sold on Monday to $53.27 per barrel on Tuesday after plunging to a two-year low of $48.99 on Friday.

The US West Texas Intermediate (WTI) oil gained $4.23 from $44 per barrel it traded early on Monday to $48.23 a barrel on Tuesday.

Group of Seven finance ministers is expected to discuss how to better manage the impacts of coronavirus on global growth during Tuesday scheduled conference call, French Finance Minister, Le Maire, said on Monday.

“Oil prices got their groove back after the world’s largest economies signalled they will be united in fighting off the economic impact of the coronavirus and on the Russian capitulation in agreeing to deliver deeper production cuts at this week’s meeting,” said Edward Moya, senior market analyst at OANDA.

However, global risks remained high as the fast-spreading coronavirus has already hit more than 60 countries including the world’s most populous black nation, Nigeria and has killed over 3,000 people across the world.

Therefore, until markets can predict likely return to normal travel and trade, global commodities will continue to struggle.

“The coronavirus is still spreading globally and until markets can possibly calculate a return of normal travel and trade, oil will struggle,” Moya said.