March 23, 2020 / 11:43 PM / 4 months ago

Crude oil futures rise, but support seen weak

FILE PHOTO: The sun is seen behind a crude oil pump jack in the Permian Basin in Loving County, Texas, U.S., November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant/File Photo

MELBOURNE (Reuters) - U.S. crude oil futures climbed nearly 3% on Tuesday in light trading as the Trump administration launched an effort to work with Saudi Arabia to stabilise oil prices.

West Texas Intermediate (WTI) crude CLc1 futures for May delivery rose $0.67, or 2.9%, to $24.03 as of 2353 GMT, adding to gains on Monday.

Brent LCOc1 futures for May delivery rose 52 cents, or 1.9%, to $27.55 as of 0015 GMT.

“However volumes are terrible, they’re very low, so this is not a high confidence move,” CMC Markets and Stockbroking chief market strategist Michael McCarthy said.

The U.S. administration has appointed a special energy representative to Saudi Arabia, Victoria Coates, as part of a diplomatic push to stabilise energy markets, hammered by a price war between Saudi Arabia and Russia.

The market is testing support following a more than 60% slide in oil prices since the start of the year due to the impact of the coronavirus on global demand and a market share war between Saudi Arabia and Russia set to bloat oil supply from April.

“Given the market’s already pricing in full production from Saudi Arabia and Russia and we’ve already priced in significant demand destruction, it’s hard to see what would cause the next significant downdraft from here,” McCarthy said.

Australian refiners Viva Energy (VEA.AX) and Caltex Australia Ltd (CTX.AX) said they expect jet fuel demand to shrink by 80% to 90% due to air travel grinding close to a halt and plan to take in less crude.

Reporting by Sonali Paul; Editing by Himani Sarkar and Richard Pullin

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