Energy stocks are higher in pre-market trading lifted by strength in oil prices as well as broader index futures which are rising on positive sentiment from a newly Congressionally approved $484 billion coronavirus relief package
Crude prices rose Wednesday after President Trump said on Twitter that he had instructed the U.S. Navy to destroy Iranian gunboats “if they harass our ships at sea.”
Brent crude futures, the global benchmark for oil markets, climbed 10.7% to $21.39 a barrel in volatile trading, after sliding to their lowest since 1999 in Asian trading hours. West Texas Intermediate futures—the U.S. benchmark—rose 28.8% to $14.90 a barrel, after plummeting 43% Tuesday to close at its lowest price in 21 years.
Oil prices pared losses and turned positive after a volatile overnight trading session which saw international benchmark Brent crude fall to its lowest level in more than 20 years. Prices are accelerating on short covering from recent weakness and on no major headlines but increasing signs that companies are cutting productions due to lack of storage. Meanwhile, inventory data is expected to show more massive builds in crude oil as well as all products.
Natural gas futures extended yesterday’s 5.4% losses on profit-taking amid seasonal lulls.
What has caused the price to spike?
Investors regained confidence after the senate approved a $480 billion stimulus package to help small businesses and hospitals, expand testing.
Trump's confrontational tweet that The US Navy should shoot at Iranian boats if they feel threatened must have convinced investors that Oil is not going anywhere soon.