Oil rallies after Fed moves to help virus-hit economy

Monitoring Desk

SINGAPORE: Oil prices rallied at the open in Asia Tuesday on Federal Reserve measures to boost the coronavirus-hit US economy, offsetting concerns about a failure to approve a rescue package.

US benchmark West Texas Intermediate was up 4.3 percent at $24 a barrel while Brent crude, the international benchmark, rose 3.8 percent to $28 a barrel.

Prices have fallen to multi-year lows in recent weeks as lockdowns and travel restrictions to fight the virus hit demand, and top producers Saudi Arabia and Russia engage in a price war.

The Fed unveiled a batch of additional aggressive measures to support the economy on Monday, including buying unlimited amounts of US Treasury debt and new steps to lend directly to small- and medium-sized companies.

Still, gains on stock and oil markets were capped when Democrats again blocked a massive rescue package for the teetering US economy.

The bill had proposed funding for American families, thousands of shuttered or suffering businesses and the nation’s critically under-equipped hospitals.

AxiCorp chief markets strategist Stephen Innes said optimism over the package has helped dampen the oil market sell-off.

But he cautioned: “The problem is, however, all the money in the world is not going to get people back on planes so long as the virus is spreading, and travel bans are in place.”(AFP/APP)