Crude Oil Prices Surge 17% After Hitting 18-Year Low

In a change of scene, international oil prices on Thursday reversed its course from heavy losses seen on the previous day, with a 20 percent surge after the US and European leaders announced measures to curb the effects of the coronavirus spread on the global economy.

Benchmark Brent crude rose by $2.10 or 8 percent to $26.98 a barrel and US WTI was up by 17 percent or $3.44 to $23.81 a barrel.

On Wednesday, the third consecutive day of relentless selling, Brent fell 14.1 percent or $4.07 to trade at $24.67/barrel, its lowest level since 2003.

US WTI had plunged 24.4 percent or $6.58 to settle at $20.37 per barrel, its lowest level since February 2002. During the day, the WTI contract hit $20.06, its third-worst day on record.

Oil has been facing pressure from the supply as well as the demand side. Governments are increasingly imposing travel restrictions and business activity has slowed down, hurting demand for fuel. On the other hand, OPEC+'s current production cuts will expire this month and the group has agreed to allow member nations to produce as much oil as they please.

News reports suggest that Saudi Arabia and Russia have been preparing to ramp up production.

Meanwhile, in the latest move by a central bank to try to halt the spiralling economic and financial crisis, the European Central Bank kicked off a 750 billion euro ($820 billion) emergency bond purchase scheme after an unscheduled meeting on Wednesday.

In India, the RBI announced that it will be purchasing government securities worth Rs 10,000 crore through OMO on 20 March to stabilise markets in the present financial environment.