Oil mixed as government pledges reach $5 trillion in coronavirus chaos
TOKYO (Reuters) – Oil prices were mixed on Friday as governments took unprecedented steps to limit the economic fallout from the coronavirus pandemic.
FILE PHOTO: A pump jack operates in front of a drilling rig at sunset in an oil field in Midland, Texas U.S. August 22, 2018. REUTERS/Nick Oxford
Brent crude was down 34 cents, or 1.2%, at $26 a barrel by 0726 GMT. U.S. crude was up 8 cents, or 0.4%, at $22.68.
Both of the benchmarks are down nearly two-thirds this year and the slump in economic activity and fuel demand has forced massive retrenchment in investment by oil and other energy companies.
Oil requirements around the world may drop by 20% as 3 billion people are in lockdown, the head of the International Energy Agency said as he called on major producers like Saudi Arabia to help stabilize oil markets.
“It’s going to be a very uncertain year for us from a price point of view,” Peter Coleman, the head of Australian oil and gas developer Woodside Petroleum told investors on a conference call on Friday.
Leaders of the Group of 20 major economies pledged on Thursday to inject over $5 trillion into the global economy to limit job and income losses from the coronavirus and “do whatever it takes to overcome the pandemic.”
While analysts doubt the moves will prevent the global economy from sliding into recession, they say the lifelines to companies and consumers will ease tattered nerves and help ensure a strong recovery when demand picks up again.
The United States has now passed China and Italy as the country with the most coronavirus cases, according to a Reuters tally, as the country faced a surge in hospitalizations and looming shortages in supplies, staff and sick beds.
Mainland China reported its first locally transmitted coronavirus case in three days and 54 new imported cases, as Beijing ordered airlines to sharply cut international flights, for fear travelers could reignite the coronavirus outbreak.
Nonetheless, global markets have seen a return of buying interest in recent sessions as governments and central banks roll out additional stimulus measures.
Reporting by Aaron Sheldrick; Editing by Richard Pullin and Kim Coghill