Moneycontrol PRO
Upcoming Webinar:Prashant Shah explains ‘Irrelevance of Bull & Bear Markets for Success in Technical Analysis’. Register For Free!

Brent oil jumps nearly 3% after Trump lays out plan for easing coronavirus restrictions

Brent was up by 75 cents, or 2.7%, at $28.57 a barrel by 0058 GMT, while U.S. crude for May delivery, which expires on April 21, was up 1 cent, or 0.1%, at $19.88 a barrel. The more active June contract was up $1.1, or 4.3%, at $26.63.

April 17, 2020 / 07:55 AM IST

Oil prices rose on Friday with Brent gaining nearly 3% after President Donald Trump laid out guidelines on reviving a U.S. economy ravaged by the coronavirus pandemic that has punched a huge hole in global demand for crude and refined products.

Brent was up by 75 cents, or 2.7%, at $28.57 a barrel by 0058 GMT, while U.S. crude for May delivery, which expires on April 21, was up 1 cent, or 0.1%, at $19.88 a barrel. The more active June contract was up $1.1, or 4.3%, at $26.63.

Trump laid out a three-stage process for ending lockdowns to stop the spread of the coronavirus that has now killed more than 32,000 Americans and nearly 140,000 worldwide, while some other countries were also relaxing restrictions.

"Oil prices are surging after President Trump issued guidelines that will see a portion of the country open a lot sooner than anyone expected," said Edward Moya, senior market analyst at OANDA in New York.

Optimism that there may be signs of an easing of the health crisis is sending stock and other riskier markets like oil higher.


COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more

Still, both oil benchmarks are heading for a second consecutive week of losses, with U.S. oil around 18-year lows: Analysts have slashed forecasts for prices and demand due to the spread of the coronavirus and oversupply concerns.

The Organization of the Petroleum Exporting Countries (OPEC) lowered its forecast for 2020 global oil demand and warned it may not be the last revision downward. OPEC now sees a contraction of global demand of 6.9 million barrels per day (bpd), compared with a small increase predicted last month, due to the coronavirus outbreak.

"Downward risks remain significant, suggesting the possibility of further adjustments, especially in the second quarter," OPEC said of the demand forecast.

OPEC and other producers including Russia, in a grouping known as OPEC+, over the weekend agreed on production cuts of nearly 10 million bpd, after an earlier cooperation agreement collapsed.

Even allowing for another 10 million bpd of cuts supposed to come from producers like the United States and Norway due to weak prices, there is still a mismatch between supply and demand of around 10 million bpd, most analysts say.
first published: Apr 17, 2020 07:50 am

stay updated

Get Daily News on your Browser
ISO 27001 - BSI Assurance Mark