Wed. Feb 26th, 2020

Texas oil rises 1.2% in hopes of rising demand after coronavirus

The price of Texas intermediate oil (WTI) closed Friday with a 1.2% rise, placing the barrel at $ 52.05, a new rise caused by hopes among investors that fuel demand will gradually increase and soon leave behind the effects of Wuhan’s coronavirus.

At the end of the operations with live voice in the New York Mercantile Exchange (Nymex), WTI futures contracts for delivery in March totaled 63 cents compared to the previous session on Thursday.

Oil prices rose in what is their best week of the year, spurred by investors’ forecasts that the impact of the coronavirus (COVID-19) on fuel demand will decrease in the coming months.

In the last month and a half, since the emergence of the virus, the demand for oil in China, the world’s second largest consumer, has plummeted due to travel restrictions, flight cancellations and quarantines.

For this reason, experts predict that the central bank of China will be generous in its stimuli to reverse the slowdown caused by the pathogen, which has instilled some confidence in investors, who rely on the recovery of the Asian giant during the second quarter of the year.

In addition, many Chinese factories are returning to normal, an issue that is also expected to help increase demand for crude.

In China, the number of people affected by COVID-19 has exceeded 60,000 cases and the disease has caused at least 1,380 deaths, mostly in the province of Hubei, epicenter of the spread of the virus.

The Organization of Petroleum Exporting Countries reduced its 2020 demand forecast for its crude oil by 200,000 barrels per day, which generated expectations that the group of producers and their allies could further reduce production, although the approval of Russia, one of the main partners.

On the other hand, the International Energy Agency expects oil demand in the first quarter to fall for the first time in the last 10 years before recovering from the second quarter.

In this context, gasoline futures contracts expiring in March were flat at $ 1.58 a gallon, and natural gas contracts, expiring the same month, added two cents to $ 1.84 per thousand cubic feet. .


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