(Bloomberg) -- Oil extended its rebound from last week’s slump as global policy makers pledged to safeguard markets from the coronavirus, while OPEC and its allies are expected to deepen production cuts.
Futures in New York have now recouped more than a third of last week’s 16% plunge in a reversal that’s come amid a broad move upward in financial markets driven by signs major economies will act to soften the impact from the virus. Group of Seven finance ministers and monetary officials will speak by teleconference on Tuesday, while OPEC+ meets in Vienna from Thursday.
All but two of 29 analysts, traders and brokers in a global poll predicted that the Organization of Petroleum Exporting Countries and its allies will announce new curbs, with an average expectation of 750,000 barrels a day. Whether that’s enough to stabilize the market and rein in oil volatility -- which has surged to highest in more than a year -- remains to be seen.
“The coordination among global finance ministers and a possible synchronized monetary easing among central banks have raised the level of reassurance in the market,” said Howie Lee, an economist at Oversea-Chinese Banking Corp. in Singapore. “If OPEC+ cuts production by 1 million barrels a day this week, it will push prices higher in the short term.”
West Texas Intermediate futures for April delivery rose 1.4% to $47.39 a barrel on the New York Mercantile Exchange as of 7:27 a.m. in London after being up as much as 3.9% earlier. The contract surged 4.5% on Monday, the most since mid-September.
Brent futures for May climbed 0.9% to $52.34 a barrel on the ICE Futures Europe exchange after a 4.5% jump on Monday. The global crude benchmark traded at a premium of $4.80 to WTI for the same month.
U.K. and Japanese central banks pledged to act as necessary to ensure stable financial markets, while leaders of the International Monetary Fund and the World Bank said they stood ready to help member nations. The OECD warned that the world economy now faces its “greatest danger” since the global financial crisis more than a decade ago.
OPEC and its allies will gather in the Austrian capital on Thursday and Friday. The average estimate in the Bloomberg survey is only slightly above the 600,000 barrel-a-day cut recommended by the organization’s technical committee last month. Russia’s energy minister said Monday that the country is focusing on that recommendation and hasn’t received any proposal from OPEC+ for a larger cut.
To contact the reporter on this story:
Sharon Cho in Singapore at ccho28@bloomberg.net
To contact the editors responsible for this story:
Serene Cheong at scheong20@bloomberg.net
Andrew Janes, Dan Murtaugh
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