Oil prices drive the market – DOW future gain over 400 points
Investor sentiment keeps unstable under the global pandemic. On Thursday, the stock markets in the Asia-Pacific region were mixed. The stock market of Japan and Australia fell, while the stock market of China, South Korea and Hong Kong rose.
Good news came from the oil market. It is reported that Saudi Arabia would support the cooperation between oil producers to stabilize the oil market. According to the earlier news from the United States and Russia, the market now is expecting that the “big” stakeholders in oil market will return to the negotiating table to solve the current dilemma of low oil prices.
“Bloomberg” also reported that, according to people with knowledge of the matter, due to the sharp fall in oil prices, China has planned to purchase crude oil for strategic reserves. Beijing government has asked all departments to start buying crude oil as soon as possible at current low price.
Indeed, US President Trump earlier stated that he believes that Saudi Arabia and Russia can settle the oil price war in the short term. On the other hand, Russian President Putin also said that he is discussing the plunge of oil prices with the United States and OPEC. As it is expected that the United States will be actively involved in the oil market, oil prices were able to stand firm on Wednesday, when the financial market sell-off continued.
In the Asian session on Thursday, oil prices rebounded significantly. WTI crude oil future regained the $22 level. US stock futures are rising, which the Dow futures is up more than 400 points, reflecting a better market sentiment.
However, the global pandemic of new coronavirus is still worrying. Rapid increase in confirmed cases, reaching nearly 1 million cases, shows that the situation may be out of control. ZFX analyst Jacob Leung said shut down of companies and job cuts worldwide may be far more severe than expected, the epidemic will continue to disrupt financial markets in the short, medium and long term.