Singapore: Oil prices rose on Friday after Wall Street gains as progress was made towards a $ 2 trillion bailout plan to help the U.S. economy affected by a corona virus.
US benchmark West Texas Intermediate crude rose 2.3% to $ 23 a barrel, while international benchmark Brent crude rose 2% to nearly $ 27.
At the end of Wednesday, the Senate unanimously approved a stimulus plan that finances the underburdened health care system, increases unemployment, and provides loans to small businesses paralyzed by a government freeze that controls the spread of the corona virus.
The House is now expected to vote on the measure on Friday.
The rise in oil prices reflected Wall Street’s gains as efforts to implement the rescue package removed concerns about a record increase in the number of jobless claims in the US.
After an agreement was not reached with Russia to further reduce production and prices, the major exporter Saudi Arabia started to unilaterally lower prices and the oil market started to decline early this month.
Blockades and travel restrictions imposed by governments around the world to curb the virus have added to downward pressure.
Riyadh is under pressure from Washington to make a new decision, but the Kremlin said the “oil topic” was not discussed at a G20 emergency video conference hosted by King Salman of Saudi Arabia.
G20 nations pledged a “united front” in the fight against coronavirus, saying they were injecting $5 trillion into the global economy to counter the pandemic amid forecasts of a deep recession.
Industry consultant IHS Markit warned that current output levels cannot be sustained throughout the second quarter because oil storage capacity will fill up.
“Production is going to have to be reduced or even shut in. It is now a matter of where and by how much,” said Jim Burkhard, vice president and head of oil markets at IHS Markit.