• Wednesday, April 24, 2024
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BusinessDay

Oil up 7% After Crashing on Supply-Demand Shock

Oil prices gain

Oil clawed back some losses after its biggest drop in three decades as investors grappled with simultaneous supply and demand shocks and the most volatile market on record.

Futures in New York rose more than 7% after losing a quarter of their value Monday in the biggest plunge since the 1991 Gulf War. A gauge of volatility in the contract jumped to the highest in data going back to 2007 as the collapse of the OPEC+ alliance set off what could be a long and bitter price war.

Meanwhile the International Energy Agency warning crude demand will drop this year for the first time since the worldwide financial crisis.

The bounce in oil looks like “nothing more than a slight correction after the huge sell-off yesterday,” said Jeffrey Halley, senior market analyst at OANDA. “Nothing has changed with regards to the structural outlook for oil after the the collapse of the OPEC+ grouping.”