Oil prices rebound after plunging on surging jobless claims

Oil prices rebounded on Friday in Asia after falling overnight amid more evidence of the coronavirus’ devastating impact on the US economy.

The US Crude Oil WTI Futures rose 1.7% to $22.98 by 11:59 PM ET (03:59 GMT), after losing more than 7% earlier in the day. International Brent Oil Futures gained 0.9%, recovering slightly from the 8% losses overnight.

Both contracts are down about 60% so far this week.

The Labor Department said the number of Americans filing claims for unemployment benefits surged to a record of more than 3 million last week, with initial claims coming in at a seasonally adjusted 3.28 million in the week ending March 21, eclipsing the previous record of 695,000 set in 1982.

Even prior to the release of the jobless claims data, oil prices were already under pressure this week as more countries ordered lockdown to curb the spread of the virus. India, the second most populous country and the third largest oil consumer in the world, started a 21-day lockdown on Wednesday.

Separately, while the Senate agreed on a $2 trillion relief package earlier this week, the bad news for the oil market is that the bill removed the $3 billion earmarked for filling the US Strategic Petroleum Reserve, which promised to support domestic producers moderately as they struggle with the collapse in prices.