Oil stabilizes by the end of the week: follow the global financial facts

The main European stock markets opened in red on Friday, weighed down by the division of the leaders of the European Union on the size of the package of financial stimuli to revive the economy, sunk by the coronavirus pandemic.

Oil capped its third weekly decline after a tumultuous start that pushed the active contract into negative territory for the first time. On the other hand, in the stock market, the European bags showed red signs.

Futures in New York rose to 2.4% on Friday, adding to a 20% rebound the day before as the focus shifted to a slowdown in production in response to the destruction of demand caused by the confinements of the coronavirus. With crude trading below $ 20 a barrel, U.S. output has rapidly declined to the lowest level since last July. Operators in the USA They also began closing old wells and halting new drilling, actions that could cut production by 20%.

(To take into account: Pandemics and remedies: how to prevent social collapse?).

The June contract has lost a third of its value during the week as the pandemic shuts down economies and keeps drivers off the road. The World Bank said global commodity markets will face lasting shocks due to the outbreak, while consultancy Rystad Energy revised its estimate for global oil demand downward further to 89.2 million barrels per day.

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OPEC and its allies have also reacted to the low price environment. The coalition agreed earlier this month to cut daily production by about 10 million barrels a day from May. Iraq’s oil minister Thamir Ghadhban said that oil prices will improve once the deal begins.

Kuwait said it has already started to cut production; It is the first major producer in the Persian Gulf, the world’s most prolific oil-producing region, to announce that it is pumping less oil ahead of schedule. Algeria also told OPEC that its cuts would begin immediately.

Oil markets also have to contend with a wave of volatility fueled by exchange-traded funds.

Stock market

The main European stock markets opened in red on Friday, weighed down by the division of the leaders of the European Union on the size of the package of financial stimuli to revive the economy, sunk by the coronavirus pandemic.

(Of interest: Economic confidence collapses to record low across Europe).

The London Stock Exchange lost 1.6% on the opening, Frankfurt, 2%, Paris, 1.5%, Milan, 1.7% and Madrid, 1.8%.

The Tokyo Stock Exchange, meanwhile, ended negative on Friday, worried about the deterioration in the results of companies in the archipelago.

European stocks closed higher on Thursday, buoyed by the recovery in oil prices and the hope of coordinated European support to deal with the economic debacle the coronavirus is leaving, against Wall Street which closed in balance.