More Crude Gains As Media Begins To Focus On Economic Rebuilding, Virus Treatments

by Ship & Bunker News Team
Tuesday March 24, 2020

Crude prices on Tuesday once again rose, albeit minimally, in the face of Washington moving quickly to provide economic relief programs combating the impact of the coronavirus pandemic.

Arguably, the relative calm exhibited by traders was also influenced by growing media coverage of government and business officials discussing how to keep the economy afloat during and after the pandemic.

Brent on Tuesday rose 12 cents to settle at $27.15 per barrel, and West Texas Intermediate gained 65 cents to settle at $24.01.

However, commodity analysts reiterated their message that more calamity is inevitable: Bjornar Tonhaugen, head of oil markets at Rystad Energy, warned in a note, "The extreme imbalance between supply and demand due to the travel restrictions has only just began to unfold in the physical markets, and the true impact will be felt in the coming weeks."

Tuesday saw senior Democrats and Republicans reporting that they were close to a deal on a $2 trillion coronavirus economic stimulus package; this accompanied news on Monday of federal programs including first time ever backing for corporate bond purchases.

Also, drug combinations tested by medical researchers in Japan and France are said to dramatically shorten coronavirus symptoms among sufferers and are coming closer to being approved for international use.

Plus, researchers are scrambling to determine why death tolls in Germany and Japan - the latter country accused of being lax in its handling of the coronavirus outbreak - are uncommonly low (for Japan, 42 deaths and only 1,140 cases as of March 24 in a nation of 126 million people).

Amid the global efforts to combat the virus, oil producers are taking steps to protect shareholders: Chevron shares on Tuesday surged after the company announced cost-cutting measures but vowed not to slash its dividend.

Michael Wirth, CEO of Chevron, said, "Our dividend is our number one priority and it's very secure.

"We're taking actions to preserve cash; it will have some impact on production in the near term but we've stayed with our financial priorities, which include protecting the dividend."

Meanwhile, finance officials from the G7 major industrial nations on Tuesday vowed to "do whatever is necessary" to restore confidence in the world economy through monetary and trade policy; they also said they would continue to consult weekly.