Yemisi Izuora
Oil prices remained volatile on Friday after a dramatic rebound from multi-year lows but stayed below US$30 a barrel on fears the deadly Covid-19 coronavirus will push the world into recession with an oversupply.
US benchmark West Texas Intermediate (WTI) was up 2.22 per cent to 25.78 in morning Asian trade.
Brent eased 0.91 per cent to 28.21 a barrel in volatile trading.
On Thursday, WTI rebounded by more than 23 per cent following US government moves to help American crude producers weather a slump in demand caused by the coronavirus pandemic, recovering almost as spectacularly as it had plunged in recent days.
Crude slumped to 18-year lows on Wednesday, with travel restrictions and other measures aimed at combating the virus hitting demand and major producers Saudi Arabia and Russia locked in a price war by ramping up production.
“Oil prices are recovering as the three-day collapse saw some bottom fishing after WTI failed to break the US$20 a barrel level,” said OANDA senior market analyst Edward Moya.
“The oil rebound also extended higher after (US) President (Donald) Trump stated he would get involved in the oil price war at the appropriate time,” Moya said in a note.
“The Trump administration is now showing signs they will try to defend the shale industry and stabilise oil prices.”
The US Department of Energy said on Thursday it will carry out Trump’s directive to top up the Strategic Petroleum Reserve to its maximum capacity.
The department said in a statement on its website it will buy a total of 77 million barrels from American producers, kicking off with an initial purchase of 30 million barrels.
Oil markets have been hammered by collapsing demand as the virus prompts sweeping travel restrictions and business closures, and as major producers Saudi Arabia and Russia engage in a price war.