SINGAPORE: Oil prices rebounded strongly on Thursday a day after US crude hit its lowest level for 18 years, as the European Central Bank launched a bond-buying scheme to combat the coronavirus pandemic.
US benchmark West Texas Intermediate was up almost 17% at nearly $24 a barrel, a day after plunging 24%.
International benchmark Brent crude was up 8.5% at $27 a barrel, a day after slumping 14%.
Oil markets have been hammered due to collapsing demand as the virus prompts sweeping travel restrictions and business closures, and as major producers Saudi Arabia and Russia engage in a price war.
Thursday’s jump came as investors bought the commodity at bargain prices, and followed the ECB’s surprise announcement of a 750-billion-euro scheme to purchase government and corporate bonds.
The so-called Pandemic Emergency Purchase Programme comes just six days after the ECB unveiled a stimulus package that failed to calm nervous markets, piling pressure on the bank to open the financial floodgates.
Analysts predict oil prices will remain at multi-year lows for some time, however.
“The continued containment and lockdown response of the world’s major economies in response to Covid-19 will advance to a sharp impact on oil demand,” AxiCorp’s Stephen Innes said.