The US crude was higher in Asian trade Wednesday but sentiment remained subdued as Saudi Arabia floods the market with oil and the escalating coronavirus pandemic saps global demand.
Prices plunged to their lowest levels in 18 years on Monday but staged a strong rebound the following day as investors took heart from moves by policymakers to support the virus-hit world economy.
In early Asian trade Wednesday, US benchmark West Texas Intermediate (WTI) was trading 1.46 percent higher at $20.77 a barrel. Brent, the international benchmark, was unchanged at $22.74 a barrel. A price war between major producers Saudi Arabia and Russia has led to a supply glut at a time when world economies are being hammered by business shutdowns and a halt in air travel due to the disease, which has killed more than 42,000 worldwide.
ANZ Bank commodities analysts said ship-tracking data showed Saudi Arabia had boosted crude exports over the past week from seven million barrels per day to around nine million barrels. This suggests that the biggest producer in the OPEC cartel is on track to reach a record 12.3 million barrel a day in April, they said in a note.
Ignoring requests from US President Donald Trump to slow down, Saudi Arabia is “intent on flooding the world with oil when there’s nary a demand,” said AxiCorp global markets strategist Stephen Innes.
Innes warned of an “unparalleled oil demand destruction” as countries tip into recession.
As of the end of March, oil prices have tanked by more than 60 percent from levels seen at the start of the year.