- Crude Oil Rises to $30 Per Barrel on Friday
Global oil prices sustained the bullish trend on Friday amid President Trump’s $1 trillion proposed stimulus package.
The Brent Crude, against which Nigerian crude oil is measured, extended gains to $30.39 on Friday during the Asian trading session.
Brent crude oil plunged to 18 years low of $24.51 per barrel on Wednesday but called the bottom on Thursday after President Trump presented a $1 trillion stimulus package to the Senate for approval.
Commenting on Saudi Arabia and Russia fight over production cut, President Trump on Thursday said: “We have a lot of power over the situation and we’re trying to find some kind of medium ground,” the president stated during a White House press conference on Thursday. “They’re in a fight on price, they’re in a fight on output, and at the appropriate time I’ll get involved.”
The US West Texas Intermediate (WTI) oil rose the most, jumped by about 26 percent from $20.04 per barrel it closed on Wednesday before the stimulus package to $27.83 per barrel in the early hours of Friday.
It is, however, uncertain if the stimulus package coupled with other measures by central banks across the world would be enough curb the impact of the coronavirus outbreak on the world’s economy and sustain global demand.
Jeff Killburg that works with KKM Financial, said the rebound in crude oil price was as a result of the ‘rubber band’ effect. “Prices are elastic and this is the snap back of a historic oversold condition in WTI,” he said.
Scott Nations, the President and Chief Investment Officer, NationsShares, said: “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.”