Oil rebounded after plunging to the lowest level in 18 years as investors weigh efforts by policy makers across the globe to strengthen economies against the impact of the coronavirus pandemic. Futures rose as much as 18% in New York, the most since December 2008, following a 24% rout in the previous session. Oil has been hammered by the dual shocks of collapsing demand and an impending supply flood, but prices are getting some relief along with other markets from stimulus measures.
The European Central Bank has unleashed an emergency bond-buying program, while the U.S. Senate cleared the second major bill responding to the outbreak. White House economic adviser Larry Kudlow said the government might take equity positions as part of corporate rescues.
The global spread of the virus pandemic continues to gather pace, with the number of confirmed cases in Europe now exceeding China. Italy’s death count has surged to almost 3,000, while the U.K. imposed tighter controls on movement including closing all schools.
“There is just extreme volatility in the market now as participants try to assess the economic impact of the coronavirus and what it means for oil demand,” said Daniel Hynes, an analyst at Australia & New Zealand Banking Group Ltd. in Sydney. “The high level of uncertainty around the hit to demand means that markets are going to continue to test these levels and invite some sort of reaction from producers.”