Economy

Oil up with G20's $5 trillion pledge, weak US dollar

G20 undertaking 'immediate and vigorous measures' to support economies, sectors most affected by virus

Övünç Kutlu   | 27.03.2020
Oil up with G20's $5 trillion pledge, weak US dollar

ANKARA

Crude oil prices were up on Friday with weak U.S. dollar and G20 nations promising to inject $5 trillion into the global economy to tackle the adverse effects of coronavirus. 

International benchmark Brent crude was trading at $26.55 per barrel at 0610 GMT for a 0.79% increase after it closed Thursday at $26.34 a barrel with a 3.83% decline.

American benchmark West Texas Intermediate (WTI) was trading at $23 a barrel at the same time for a 1.77% gain after ending the previous session at $22.60 a barrel with a 7.72% loss.

Leaders of the Group of 20 major economies in the world, known as G20, pledged Thursday to inject over $5 trillion into the global economy "as part of targeted fiscal policy, economic measures, and guarantee schemes to counteract the social, economic and financial impacts of the pandemic."

Their statement also noted that G20 was undertaking "immediate and vigorous measures" to nourish economies and protect workers, businesses, and sectors most affected by the virus.

The decision was seen by investors as a move that can increase the global oil demand and push prices higher.

In the U.S., the world's biggest economy, a record number of 3.3 million people filed for unemployment for the week ending March 21 in order to claim jobless benefits from the government, according to data from U.S.' Department of Labor on Thursday.

This was perceived as investors that the negative impact of coronavirus on the American economy can linger and keep oil demand low in the world's largest oil-consuming country.

After the data, U.S. dollar index, which includes a basket of currencies like the euro, Japanese yen, British pound, Canadian dollar, Swedish krona, and Swiss franc, closed Thursday at $99.29 by plummeting 1.6%, and it was trading at $99 at 0610 GMT for a 0.31% decline.

Weakened American dollar also supported the demand for crude oil slightly since oil prices are indexed to the greenback.

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