Crude oil prices climbed higher on Tuesday as concerns about outlook for energy demand eased a bit after the Chinese central bank announced that it would support small businesses and industries affected by the pandemic.
Short-covering after recent sharp losses contributed as well to the rise in oil prices.
The PBOC will step up the prudent monetary policy’s support to the real economy, especially for industries and small businesses hit hard by the pandemic,” the People’s Bank of China said in a statement on Tuesday. The central bank said it will promote healthy and stable development of the financial markets and provide a good monetary and financial environment. It reiterated it will keep liquidity reasonably ample.
The bank had decided on Monday to cut the amount of money that banks need to have in reserve for their foreign currency holdings, an attempt to help limit the drop in the yuan.
West Texas Intermediate Crude oil futures for June ended higher by $3.16 or about 3.2% at $101.70 a barrel.
Brent crude futures moved up by about 2.6% to $104.99 a barrel today. Both WTI and Brent futures had tumbled by about 4% on the previous session.
Markets now look ahead to weekly oil reports from the American Petroleum Institute (API) and U.S. Energy Information Administration (EIA). The API’s report is due later today, while EIA is scheduled to release its inventory data Wednesday morning.