By Barani Krishnan
Investing.com - Oil prices jumped 5%, rebounding sharply from last week’s crash, on hopes of deep production cuts by OPEC to offset crude demand lost to the coronavirus and amid signs that major central banks and finance ministers were coordinating action to prevent a global economic collapse.
* By 12:40 PM ET (17:40 GMT), West Texas Intermediate, the U.S. crude benchmark, was up $2.30, or 5.1%, at $47.06 per barrel,. WTI fell 5% Friday and 16% on the week, its most in a week since mid-December 2008, the era that spawned the Great Recession. WTI rebounded as Wall Street’s three major stock indexes all surged about 2% each.
* Brent, the London-traded global benchmark for crude, was up $2.54, or 5.1%, at $52.21. Brent lost 4.8% on Friday and 15% on the week.
* OPEC’s 13 members open their regular twice-yearly meeting on Thursday before a special session on Friday with 10 producing allies led by Russia, who are collectively known as OPEC+. Saudi Arabia, which dominates the group, is trying to push for an agreement to cut another 1 million barrels per day in on top of 2.1 million bpd already agreed in December. Russia, whose cooperation is vital for a cut, hasn’t given an emphatic yes to the Saudis.
* As for rate cut expectations, fed funds futures are pricing in a 100% chance that the Federal Reserve will cut rates by 50 basis points at its meeting March 18, Investing.com’s Fed Rate Monitor Tool showed. The Bank of Japan and Bank of England have also said they ready to take steps to stabilize financial markets, stoking investor hopes of coordinated action. The Group of Seven finance ministers will, meanwhile, hold a teleconference Tuesday to coordinate response to the coronavirus outbreak, France’s Finance Minister Bruno Le Maire said Monday.