Oil Up On Sudden Optimism of OPEC Talks As Health Officials Anticipate Turning Point In Virus Fight

S&P 500 Index leaps upward due to optimism of end of pandemic: File Image/PixaBay

Apparently deciding that their earlier pessimism about the oil deal was unwarranted, crude traders on Wednesday caused prices to jump upward on the assumption that a meeting Thursday between the Organization of the Petroleum Exporting Countries (OPEC) and allies will lead to output cuts and help offset the market pandemonium caused by world governments' reaction to the coronavirus.

West Texas Intermediate crude rose 73 cents to trade at $24.34 per barrel, while Brent gained 40 cents to trade at $32.26 per barrel.

Bjornar Tonhaugen, head of oil markets at Rystad Energy, said, "The coming extraordinary producing-countries meeting is the only hope on the horizon for the market; nobody wants to go short ahead of what could be a 'positive surprise' by OPEC++."

The gains on Wednesday were said to be triggered by Russia, which earlier in the session announced it is ready to cut oil production by 1.6 million barrels a day (bpd), or 14 percent of its output.

In addition to oil's rise, Wednesday saw signs that other markets are latching onto signs of optimism regarding the pandemic, with the result that the benchmark S&P 500 Index jumped 3.4 percent, sending the gauge more than 20 percent over its March 23 low, which signals a bull market.

This was triggered by Anthony Fauci, director of the U.S. National Institute of Allergy and Infectious Diseases, who on Wednesday stated that the start of a turnaround in the fight against the coronavirus could come after this week.

He added, "If in fact we are successful, it makes sense to at least plan what a re-entry into normality would look like; that doesn't mean we're going to do it right now, but it means we need to be prepared to ease into that."

This coincided with the Centers for Disease Control and Prevention considering relaxing coronavirus guidelines as early as this week, allowing Americans who have been exposed to the virus but are asymptomatic to return to work as long as precautions are taken.

Meanwhile, John Hopkins University followed in the footsteps of IHME (the modeller that earlier this week downgraded its rate of death, hospitalization and other projections) by changing its trending description of the virus to "down,' similar to current trending statuses for Italy and Spain.

Also, another potentially life-saving virus treatment expected to soon move to human clinical trials, EIDD-2801from the Gillings School of Global Public Health, was described by researchers as preventing severe lung infection in previous trials, theoretically making it useful for treatment or as a preventative for those exposed to the virus who show no symptoms of the disease.