Given the possibility of coordinated central bank action to face the economic effects of the coronavirus epidemic, traders ran into the oil markets on Monday, causing oil futures value surge. Brent oil futures added 7.51 percent on Monday's session, followed by Western Texas Intermediate Oil futures went up by 7.42 percent.
Traders expect the OPEC members and Russia to cut the oil production this week. Their expectations were boosted by Russian president Vladimir Putin's latest declarations about the topic. He said that Russia was willing to sit with the OPEC to try to stabilize the oil prices, which have heavily suffered due to the impact of the coronavirus.
"I want to stress that for the Russian budget, for our economy, the current oil prices level is acceptable," said Putin on Sunday, “It has given us additional budget revenues and – this is key – offered possibilities for our oil extracting companies to invest in promising development projects,” he added.
The OPEC is expected to meet on Vienna on March March 5-6 and is expected to discuss whether it's appropriate to extend the current output cuts, that were agreed to run to the end of this month.
By 8:27 GMT the Western Texas Intermediate Oil futures went up by 2.07 percent, at 47.72, while the Brent oil futures climbed 1.46 percent, at 52.66.
Trump Calls for Interest Rate Cuts
Meanwhile, given the increasing fears related to the coronavirus outbreak, US President Donald Trump called the Federal Reserve to deliver a significant cash rate cut. This is not the first time President Trump tries to influence the Federal Reserve's policy decisions, a move that is highly criticized by those who consider that central banks should remain independent from the government.
"Our Federal Reserve has us paying higher rates than many others when we should be paying less. Tough on our exporters and puts the USA at a competitive disadvantage. Must be the other way around. Should ease and cut-rate big," stated Trump on his Twitter account.
Trump was responding to the Australian Reserve Bank's latest decision to cut the cash rates by 25 basis points, adding that he expects the central bank to further ease its monetary policy to fight the effects of the coronavirus epidemic on the global economic performance.
By 8:39 GMT the US dollar went up by 0.27 percent against the Canadian Dollar, at 1.3358. Conversely, it gained 0.01 percent against the Swiss Franc, at 0.9592. On the other hand, it went down against the Japanese Yen by 0.16 percent, at 108.13.