Oil prices bounced 8% on Tuesday from the biggest one-day rout in nearly 30 years. This caused by the investors eyed the possibility of economic stimulus amid a price war between Russia and Saudi Arabia. On the other hand, coronavirus cases slowed in China.
President Donald Trump on Monday said he will be taking “major” steps to gird the U.S. economy against the impact of the spreading coronavirus outbreak. He also will discuss a payroll tax cut with congressional Republicans on Tuesday.
Brent crude futures rose by $2.85, or 8.3%, to $37.21 a barrel by 0605 GMT, while U.S. West Texas Intermediate (WTI) crude gained $2.46, or 7.9%, to $33.59 a barrel.
According to Reuters, trading volumes in the front-month for both contracts hit record highs in the previous session after a three-year pact between Saudi Arabia and Russia and other major oil producers to limit supply fell apart on Friday.
“In times of turmoil, nothing is more important in restoring confidence than the government appearing calm. In control of the situation, how tenuous that control may be,” said Jeffrey Halley, senior market analyst at broker OANDA in a note.
Asian shares bounced and bond yields rose from historic lows. The speculation of coordinated stimulus from global central banks and governments calmed panic selling.
The sentiment lifted after Chinese President Xi Jinping visited Wuhan.
Wuhan, the epicenter of the coronavirus outbreak, for the first time since the epidemic began. And also, as the spread of the virus in mainland China sharply slows.
China, the world’s second-largest oil consumer, is trying to get people in hard-hit Hubei province back to work by using a mobile phone-based monitoring system that will allow people to travel within the province.