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Petroleum reserves purchasing expectation encourages

by Bunkerist
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Oil prices, backed by investors’ enthusiasm on having a satisfactory deal and the hopes that countries would full up their committed strategic reserves, returned from the losses of the previous session on Wednesday.

Still, concerns about global over-supply relating to coronavirus and a warning of the International Monetary Fund (IMF) about a deep recession are keeping gains under control.The IMF’s warnings about the steepest global decline since the Great Depression of the 1930s have been affecting the financial markets.The global economy is expected to shrink by 3% during 2020, with the collapse of coronavirus-induced performance.

Brent futures LCOc1 were up 24 cents, or 0.8%, at $29.84 a barrel as of 0539 GMT, after falling 6.7% on Tuesday.West Texas Intermediate crude CLc1 rose 38 cents, or 1.9%, to $20.49, having crashed 10.3% in the previous session.

Both criteria are concerned about whether a record global production cut by the producers can compensate the drop in demand caused by the coronavirus pandemic.

The prospect of purchasing large quantities of products for the strategic stocks of consumers supports the market. In a statement made on Tuesday, it was said that the United States was in a process of 23 million barrels of domestic oil storage with the Strategic Petroleum Reserve (SPR) with nine energy companies.

The expectations that also non-OPEC + members like the USA and Canada will decrease the output encourage investors as well. In addition, US shale production is expected to drop by 194,000 barrels (bpd) per day in April.

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