Oil prices rebound after hitting lowest levels for 18 years

Contract workers at Astron Energy's oil refinery got into wage dispute with management on Wednesday.
Contract workers at Astron Energy's oil refinery got into wage dispute with management on Wednesday.

Oil prices rebounded strongly Thursday a day after US crude hit its lowest level for 18 years, as the European Central Bank launched a bond-buying scheme to combat the coronavirus pandemic.

US benchmark West Texas Intermediate was up almost 17 percent at nearly $24 a barrel, a day after plunging 24 percent.

International benchmark Brent crude was up 8.5 percent at $27 a barrel, a day after slumping 14 percent.

Oil markets have been hammered due to collapsing demand as the virus prompts sweeping travel restrictions and business closures, and as major producers Saudi Arabia and Russia engage in a price war.

Thursday's jump came as investors bought the commodity at bargain prices, and followed the ECB's surprise announcement of a 750-billion-euro scheme to purchase government and corporate bonds.

The so-called Pandemic Emergency Purchase Programme comes just six days after the ECB unveiled a stimulus package that failed to calm nervous markets, piling pressure on the bank to open the financial floodgates.

Analysts predict oil prices will remain at multi-year lows for some time, however.

"The continued containment and lockdown response of the world's major economies in response to COVID-19 will advance to a sharp impact on oil demand," said AxiCorp's Stephen Innes.

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