Oil prices soared 1% Wednesday, with Brent growing a seventh consecutive day, amid deep optimism as new coronavirus cases drop for the second day in China and concerns rose over supply after a U.S. shift to cut more Venezuelan crude from the market.
Brent crude was up by 59 cents, i.e., 1%, at $58.34 per barrel, while U.S. oil was up 55 cents, i.e., 1.1%, at $52.60 per barrel.
China remains to be struggling to get production going again in the world’s second-largest economy, after imposing stringent metropolis lockdowns and travel restraints to curb the virus that has now killed over 2,000 people; however, buyers remain confident that the economic fallout may be short-lived.
Official data confirmed that new cases in China dropped for a second consecutive day, although WHO has cautioned there’s not enough information to know if the epidemic was being contained.
Brent has risen almost 10% since reaching the bottom low for this year to date last week, most recently backed by a U.S. decision Tuesday to blacklist a trading subsidiary of Russia’s Rosneft that President Trump’s administration said provides financial aid to Venezuela’s government.
America struck sanctions on Rosneft Trading, the Geneva-stationed unit.
The Swiss unit “has been Venezuela’s main channel for brokering cargos, which find their way predominantly to refineries in China,” stated Stephen Innes, chief market strategist at AxiCorp.