Oil Recovers From Earlier Losses
Oil prices clawed back some of their earlier losses on April 22, with the West Texas Intermediate (WTI) contract for June delivery rising 27.2% to $14.72/b, while Brent climbed $11.6% to $21.58/b.
The spike came after US president Donald Trump ordered the US navy to "shoot down and destroy any and all Iranian gunboats if they harass our ships at sea." Earlier this week the Pentagon claimed that ships of Iran's Islamic Revolutionary Guard Corps had been carrying out "dangerous and provocative" operations near US Navy and Coast Guard ships in the Persian Gulf.
The US Senate also approved a $484bn stimulus package on April 21. The House of Representatives is due to vote on the measures on April 23. Another factor has been the easing of some lockdowns across the world.
Even so, the rally could be short-lived. Fears remain high that available oil storage – the weakness of the WTI contract – could run out in a matter of weeks, and a conference call between ministers from the Opec+ coalition of producers on April 21 did not result in any new supply cuts being announced. Earlier, Opec+'s lead members Russia and Saudi Arabia suggested they might deepen cuts if necessary to prop up prices.
Non-Opec+ producers have only offered forecasts of organic cuts to supply. Norway has said it will decide soon whether to impose a unilateral cut to its production, but the petroleum ministry has not explained how it would do that.
