• Sunday, May 26, 2024
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BusinessDay

Oil up to $35 a barrel as European stock markets rise, easing sell off

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Oil gained about $2 a barrel to rise to $35.04 in early European trade Friday as the rout in global shares eased with European markets rising following a historic day of losses caused by spiralling concerns over the impact of the coronavirus outbreak.

Traders said the oil market had been headed for its largest weekly collapse since 2008 as a bitter price war erupted between OPEC and its allies, and demand cratered from the coronavirus outbreak.

Futures in New York are down 21% this week, more than any other period since the financial crisis.

Stockpiles may grow by the most on record in April as Saudi Arabia and Russia race to increasent Donald Trump issued a travel ban from Europe.

In London the FTSE 100 rose more than 3 per cent, clawing back some ground after shedding a tenth of its value on Thursday.

The Stoxx Europe 600 gained 2.5 per cent following its worst single session in history. US stock futures pointed to gains of around 4 per cent each for the major indices following the largest one-day fall on Wall Street since 1987.

Daily swings of several percentage points have become commonplace in global markets over the past weeks, as traders grapple to price the escalating economic disruption from the coronavirus and central banks step in to try to support capital markets and economies.

“We expect public fear and economic disruption to continue to rise through the end of March, as the virus continues to spread in Europe and the US,” said Mark Haefele, chief investment officer at UBS Wealth Management.

Authorities in Europe moved to try to calm markets. Italian and Spanish market regulators banned bets against 154 stocks in an attempt to calm the worst of the tumult in their equities markets.

The short bans are at present only in effect for Friday’s trading session. Several central banks around the world also announced measures to try to bring some stability to markets after another punishing week of selling.

Norway’s central bank cut interest rates and added liquidity to the market, while the Bank of Japan bought billions of dollars of Japanese government bonds and the Reserve Bank of Australia injected A$8.8bn ($5.5bn) into the financial system.