Oil Price Gains Narrow on Prospects of G7 Coordination; No ‘Panic’ in Equity Markets

[The Financial News]


Intervention by the Group of Seven (G7) on the 9th (local time) helped ease some of the market’s anxiety.
International oil price gains slowed after the G7 decided that, although finance ministers failed to reach a conclusion on releasing oil from the strategic petroleum reserve (SPR) at their meeting that day, energy ministers would finalize the plan at their meeting on the 10th.
According to Consumer News and Business Channel (CNBC), the US, whose SPR currently stands at only about 58% of storage capacity, expects the G7 to agree on a coordinated release of 300–400 million barrels, equivalent to 25–30% of the seven countries’ combined SPR.
After briefly breaking above 100 dollars a barrel in electronic trading overnight and approaching 120 dollars, international oil prices saw their gains narrow sharply once regular trading began on the 9th.
Brent Crude Oil, the global benchmark, saw its May futures contract jump 6.42 dollars, or 6.93%, to settle at 99.11 dollars per barrel.
West Texas Intermediate crude oil (WTI), the US benchmark, also surged, with April futures rising 4.00 dollars, or 4.40%, to 94.90 dollars per barrel.
In earlier electronic trading, Brent had spiked to 119.50 dollars per barrel and WTI to 119 dollars.
On the New York market, natural gas prices actually fell. April futures declined 0.081 dollars, or 2.54%, to 3.105 dollars per million BTU.

The New York Stock Exchange (NYSE) extended its decline, but there was no repeat of the panic seen in Asian markets, with the tech-heavy Nasdaq Stock Market (NASDAQ) even rebounding at one point during the session.
In afternoon trading, the Dow Jones Industrial Average (DJIA) was down 1% at 46,994, while the S&P 500 Index was 0.7% lower at 6,693.
The NASDAQ was off 0.40% at 22,298.
The Chicago Board Options Exchange (Cboe) volatility index, known as the Cboe Volatility Index (VIX) and often referred to as Wall Street’s “fear gauge,” fell 4.75% to 28.09.

dympna@fnnews.com Song Kyung-jae Reporter