By Adedapo Adesanya
Prices of crude oil appreciated by more than 2 percent on Monday as the United States Federal Reserves announced aggressive asset purchases to support markets.
During the session, the Brent crude gained 29 cents or 1 percent to trade at $29.29 per barrel, while the US West Texas Intermediate crude improved by 73 cents or 3.23 percent to trade at $23.36 per barrel.
Economies around the world have put up measures that will help stifle the effect COVID-19 since its outbreak in China late December, affecting prices of the commodity.
On Monday, the US central bank said it would purchase securities that will support its financial conditions.
As demand continue to drop, the OPEC+ production cuts currently in place will expire at the end of the month, meaning nations will soon be allowed to pump as much as they please.
Saudi Arabia has announced plans to increase its daily production to a record 12.3 million barrels per day in April. By comparison, the Kingdom pumped roughly 9.7 million bpd in February. Russia is among the other OPEC+ nations that has said it, too, could ramp up production.
Russia is intentionally tanking prices in a bid to derail the US shale oil boom while Saudi Arabia is punishing Russia by ramping up production at the worst possible time following its failure to cut down production earlier in March.
US President, Mr Donald Trump, under pressure from some oil companies, has signaled a willingness to step into the middle of the Saudi-Russia battle.
The Trump administration has already moved forward with plans to fill up the nation’s emergency stockpile by purchasing vast amounts of crude from small and medium-sized US producers.
The Energy Department plans to ask Congress for funding to buy tens of millions of barrels of oil , which will come very cheap given the crash in prices.
US officials are also exploring a diplomatic effort to get Saudi Arabia to stop flooding the market with cheap oil and cut production instead.
There were also reports that the Trump administration is also considering sanctions on Russia in order to stabilise oil prices.
Dipo Olowookere