Oil prices rebound after Trump, Putin agree to energy market talks

LONDON: Oil prices firmed yesterday after US President Donald Trump and Russian President Vladimir Putin agreed to talks aimed at stabilising energy markets, with benchmarks climbing off 18-year lows hit as the coronavirus outbreak cut fuel demand worldwide.

Brent crude was up 87 cents, or 3.8%, at US$23.63 (RM101.92) a barrel by 1106 GMT after closing on Monday at US$22.76, its lowest finish since November 2002.

US crude was up $1.45, or 7.2%, at US$21.54 (RM92.90) a barrel after settling in the previous session at US$20.09, its lowest since February 2002.

Oil markets have faced a double whammy from the coronavirus outbreak and a race to win market share between Saudi Arabia and Russia.

Trump and Putin agreed during a phone call to have their top energy officials discuss stabilising oil markets, the Kremlin said on Monday.

Although the futures market is seeing a recovery, physical cargoes are selling in some regions at single digits, with sellers offering big discounts.

“The gap between physical assessments and futures reflects the differences between the realities on the ground and speculation about efforts to ease that pressure going forward,” JBC Energy said.

With a plunge in prices that has knocked about 60% off oil prices this year, a commissioner with the Texas state energy regulator renewed a call for restrictions on crude production because of the national supply glut.

In a sign of how well the market is supplied, the front-month Brent futures contract for May is trading at a discount of US$13.95 per barrel to the November contract, the widest contango spread ever seen. A contango market implies traders expect oil to be higher in the future, encouraging them to store oil now to sell later. – Reuters