Oil prices came down after slipping to new four-year lows, sapped by fears for fuel demand and the global economy amid travel and social lockdowns triggered by the pandemic coronavirus.
Brent crude was up by 34 cents, or 1.2 per cent, at $29.07 a barrel by 0238 GMT, after falling earlier to $28.40, the lowest since early 2016. The international benchmark fell 4.3% on Tuesday.
US crude was up by 13 cents, or 0.5 per cent, at $27.08 a barrel, after falling to as low as $26.20, also the lowest in four years. West Texas Intermediate fell 6 per cent on Tuesday.
“Demand growth is set to recover from H2 2020, as the impact of Covid-19 fades and affected economies post v-shaped recoveries,” Fitch Solutions said in a note.
A fall in US inventories of crude, gasoline and distillates, as reported by an industry group, provided some support to prices, but the demand outlook remains grim amid a price war among major producers.
The impact on oil demand is starting to show in official statistics with Japan’s trade bureau saying on Wednesday that crude imports into the world’s third-biggest economy fell 9% from a year earlier in February.
Virgin Australia became the latest airline to shut down its international network with the suspension of all overseas flights.
Also in Australia, Oil Search joined other energy explorers in slashing expenditure and new activity to cope with the fall in prices.
Elsewhere, Iraq’s oil minister pleaded for an emergency meeting between members of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers to discuss immediate action to help balance the oil market.
A price war has broken out amid the evaporation of demand after the collapse of an agreement on withholding supply between OPEC and major producers including Russia, a grouping known as OPEC+.
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