By Barani Krishnan
Investing.com - Oil prices rose as much as 3% on Tuesday as crude contracts caught some bids amid Wall Street’s comeback rally on expectations the U.S. Senate will pass a $2 trillion stimulus bill to soft-land the world’s largest economy from disruptions caused by the Covid-19.
West Texas Intermediate, the New York-traded benchmark for U.S. crude prices, settled up 65 cents, or 2.8%, at $24.01 per barrel.
Brent, the London-traded global benchmark for crude, was up 36 cents, or 1.3%, to $27.39 by 4:30 PM ET (20:30 GMT).
Despite Tuesday’s positive prices that followed the previous day’s 3% rebound on WTI and 5% on Brent, oil prices were still on track to lose almost 60% in March, their worst ever performance in a month.
“Demand destruction is only getting worse for the energy space and it will probably be impossible for oil prices to continue to stabilize,” said Ed Moya of online trading platform OANDA.
“It is hard to imagine a scenario that involves a sustained move higher with oil prices unless a breakthrough is made with Texas rejuvenating OPEC + talks or lockdown efforts are eased and demand for crude slowly returns.”
Texas, which produces more oil than any U.S. state, is toying with production limits to reduce the effects of the massive glut in global crude supply from the phenomenal drop in flying, driving and other activity across the world due to shutdowns over the coronavirus crisis.
Texas is hoping to work with the Trump administration, which is looking to appoint a new energy envoy to Saudi Arabia to convince the kingdom and Russia to ease their price war and their fight for market share, which has exacerbated the selloff.
The Trump administration is, meanwhile, hoping to reopen in two weeks sections of the U.S. economy from the shutdown, with the president repeatedly tweeting since the start of the week that “THE CURE CANNOT BE WORSE (by far) THAN THE PROBLEM!”
Trump said in a TV town hall today that "We would love the country to be open by Easter (April 12)."