Oil Rises On U.S./Russia Agreement As Virus Infection Rates Slow In Some Countries

Meanwhile, Iraq prepares to pump all-out: File Image/PixaBay

U.S. president Donald Trump and Russia president Vladimir Putin vowing on Tuesday to find ways to help stabilize oil prices resulted in crude gains of almost 2 percent, with West Texas Intermediate gaining 39 cents to settle at $20.48 per barrel and Brent falling minimally by 2 cents to settle at $22.74 per barrel.

The agreement between the two countries was viewed as a necessary strategy in the face of the price wear between the former Soviet Union and Saudi Arabia.

The Saudis are hardly alone in trying to take advantage of a cratering market: Iraq will reportedly raise output in April by about 200,000 barrels per day (bpd), reaching 4.8 million bpd in average production.

Still, the main impediment to higher oil prices remains the coronavirus, and Michael Tran, managing director of energy strategy at RBC Capital Markets, said of the disease that has killed more than 39,000 worldwide, "COVID has taken the oil market hostage.

"The unprecedented pace of demand destruction has forced the hand of refineries, on a global level, to issue run cuts, leaving barrels from the U.S. to the North Sea, to Asia searching often unsuccessfully for homes."

Meanwhile, it is widely believed that the next two weeks will be the worst for infections overall as the virus reaches its apex; however, some good news was reported in the U.S. infection hot spots of New York, California, and Seattle, Washington, where there are signs of the disease's spread slowing.

New York's average of day-over-day case increases for the past seven days was 17 percent compared to 58 percent for the previous seven-day period; in Northern California "the surge we have been anticipating has not yet come," according to Dr. Jahan Fahimi, medical director at the University of California San Francisco Health; and in Washington's King County two new reports from an institute specializing in studying disease transmission dynamics showed social distancing measures appeared to be making a difference.

More encouraging, infection rate increases are dropping in other countries, including hot spot Italy, parts of Canada (in B.C. from 24 percent to 12 percent, although Quebec has suffered a huge spike) and in Australia (where the daily infection rate has been halved).