Oil prices rose moderately on Tuesday, the heavy pressure of the coronavirus pandemic on demand and prospects for the upcoming $ 2 trillion US economic aid package balanced each other.
India, the world’s third-largest oil consumer, ordered its 1.3 billion citizens to stay home for three weeks starting Tuesday. It became the last major fuel user worldwide announcing social movement restrictions that destroy demand for gasoline and jet fuel.
The oil market is experiencing the unexpected price war between Saudi Arabia and Russia and the twin shock created by an outbreak. Pandemic is on track to reduce fuel demand by at least 10% worldwide. It seems impossible for oil prices to continue to stabilize.
Brent LCOc1 futures rose 12 cents, or 0.4%, to settle at $27.15 a barrel. West Texas Intermediate (WTI) crude CLc1 gained 65 cents, or 2.8%, to settle at $24.01.
Early in the session both Brent and WTI were trading up over 5%. U.S. gasoline futures RBc1, meanwhile, soared over 30% early day and closed up about 8%.
Saudi Arabia plans to increase its exports, even though it has not increased in March. US crude oil stocks are also expected to rise.
The extreme imbalance between supply and demand has started to appear in the physical markets due to travel restrictions, and the real impact will be felt more evident in the coming weeks.