Oil prices have stabilized on Monday, with highs for the past four weeks, as holiday trade in Singapore, London and New York has plummeted, and there have been concerns over supply cuts as demand has improved.
Brent was trading at $ 35.13 a barrel, while US oil was up 10 cents, or 0.3 percent, to $ 33.35 a barrel. Both are down 45 percent so far.
“The uncertainty surrounding the current travel policy in the U.S. is so great that the American Automobile Association has not released its Memorial Day travel forecasts,” said Bjorn Tonhagen, head of oil markets at Rusted Energy.
The escalating tensions between the US and China, the world’s biggest oil consumers, have also raised concerns about demand’s demand for Beijing’s measures to enforce Hong Kong’s security law.
Relations between Washington and Beijing have deteriorated since the outbreak of the coronavirus, and the two countries already have conflicts over Hong Kong, human rights, trade and US support for the China-sued Taiwan.
Pricing is backed by global supply cuts with the Organization of Petroleum Exporting Countries and its partners called OPEC +, which is now voluntarily resolving 9.7 million barrels per day of production a month.
Data from fuel services firm Baker Hughes show that the US rig count, an early indicator of future production, fell to a record 318 from week 21 until May 31.
“The sharp decline in global oil production is undoubtedly the key to the rise in oil prices,” Commerzbank said.
Meanwhile, the big week for European policy makers on the euro Monday is at a level of 9 1.09, as they discuss the framework of the recovery fund aimed at helping member states.
Austria, the Netherlands, Denmark and Sweden are seeking loans from a time-limited fund for countries struggling to cope with the epidemic, ahead of funding proposed by France and Germany last week for the EU’s coronavirus recovery plan.
The Franco-German plan sent last week’s Euro Rally above 10 1.10, before the four-nation awaited counter-proposal pushed it below 9 1.09.
Opponent proposals advanced on Wednesday than the European Commission’s own plans for the Recovery Fund, and any proposals from the original plan will be suppressed
On the other hand, “we believe it will be a major euro-positive event if the Franco-German loan proposal (miraculously) passes the test next week,” Nordea strategists said.
On Monday, the single currency was trading at $ 1.09, but at the beginning of March it fell 5 percent to 1.15.
Elsewhere, the US dollar lost previous gains and plummeted on the day. The greenback, which is behaving like a safe haven asset in a time of market chaos and political uncertainty, is at a weekly high of 99.74.
Due to strong trade ties with China and the offshore yuan, the Australian dollar has fallen to the US dollar.
Further unrest over US-China relations has prompted some investors, such as UBS Wealth Management, to take a “defensive” position in Hong Kong. “() The biggest risk for global investors is what happens when it becomes more detailed in broader relationships,” said Mark Heffel, its chief investment officer.