U.S. oil prices ended Tuesday down 54% for the month and 66% for the quarter. A pump jack in an oil field in Midland, Texas.
Photo: nick oxford/ReutersU.S. oil prices rose Tuesday, paring some of their slide from a day earlier but still recording their largest drop in any month ever as the coronavirus crisis dents fuel demand.
U.S. crude futures rose 1.9% to $20.48 a barrel on the New York Mercantile Exchange, a day after crashing to a fresh 18-year low. Prices ended Tuesday down 54% for the month and 66% for the quarter, their largest monthly and quarterly drops ever, according to a Dow Jones Market Data analysis of figures going back to 1983.
Brent crude, the global gauge, edged down 0.1% to $22.74 a barrel on the Intercontinental Exchange on Tuesday.
Oil markets have been battered by the coronavirus, which has sapped demand as travel around the world grinds to a halt and people consume less fuel. At the same time, a price war between Saudi Arabia and Russia over their share of global energy markets threatens to make the glut of oil even more severe.
The crash in prices is a major threat to energy producers around the world, including U.S. shale companies. President Trump and Russian President Vladimir Putin held a call Monday in which they agreed on the importance of stability in energy markets. Meanwhile, Texas regulators are considering curtailing the state’s output for the first time in decades to help prices stabilize.
But even those measures might not be enough to boost oil, analysts say, with estimates of the demand drop now climbing as high as 20 million to 30 million barrels a day.
“Even an entirely illusionary production cut of 5 million barrels a day would hardly overcome the real problem,” Commerzbank analysts said in a note to clients.
Tuesday’s gains for oil came with other raw materials climbing too after figures showed an official gauge of China’s manufacturing activity rebounded strongly in March as work resumption picked up. That is an encouraging sign for traders because China is the world’s largest consumer of commodities.
Front-month copper futures rose 3.6% to $2.24 a pound, also trimming a sliver of their recent declines. They fell 20% for the quarter, the largest such drop since 2011.
China’s economic shutdown earlier in the year to stop the spread of the virus began denting demand for oil and other materials such as copper, starting a downward spiral in prices that has continued with the pandemic spreading around the world.
Some analysts are still skeptical the global economy can quickly bounce back, with the Trump administration extending social-distancing guidelines in the U.S. through the end of April and many other countries taking similar steps.
Write to Amrith Ramkumar at amrith.ramkumar@wsj.com
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