Markets
Crude Oil Rebounds to $26 Amid Huge Stimulus Packages
- Crude Oil Rebounds to $26 Amid Huge Stimulus Packages
Oil prices rebounded on Thursday as central banks across the world announce stimulus to bolster economic growth and contain the impact of the coronavirus pandemic.
The Brent oil, against which Nigerian crude oil is measured, rose by 6.2 percent or $1.3 to $26.63 per barrel on Thursday after China said there is no new case of the virus, even in Wuhan City, the origin of the outbreak.
Other factors, like the huge stimulus announced by President Trump to support businesses and the American people, boosted sentiment across the global market. Suggesting this might be short-lived, especially without a vaccine to contain the virus yet.
“Crude was wildly oversold, with a Relative Strength Index which got below 14, the lowest I’ve ever seen for any commodity, and we’ve now decided that maybe the global economy isn’t going to come to an end,” said Scott Nations, the president and chief investment officer at NationsShares.
However, some experts believe the new measures would be insufficient given the size of the damage done so far.
“Our current balances suggest that prices will have to drop further, likely to $10 per barrel, or even below in the worst case, to trigger production shutdowns,” Rystad Energy’s senior oil markets analyst Paola Rodriguez-Masiu said.
