US oil bounces after crash but stocks suffer big losses

US crude prices bounced back into positive territory Tuesday, a day after crashing below USD 0.00 for first time owing to crippled demand and a stor glut, while commodity rout sent equities sharply lower. Investors were also tracking developments in rth Korea following US reports that Kim Jong Un had undergone cardiovascular surgery earlier this month and was in "grave danger".

West Texas Intermediate for May delivery rose to USD 1.10 a barrel after diving to an unprecedented low of -USD 37.63 in New York as pandemic brings global ecomy, transport and factory activity to a halt. However, it later eased back to sit 30 cents higher.

sell-off in May futures came because contract expires later Tuesday, meaning traders needed to find buyers to take physical possession of oil -- a job made near-impossible as stor becomes scarce. However, focus is w on June contract, which had trading volumes more than 30 times higher. That rose towards USD21 a barrel, from USD20.43 on Monday.

Brent crude, international benchmark, was changing hands at USD23.87 for June delivery, down from Monday. collapse in WTI "was driven by a precipitous drop in demand caused by market expectation that US lockdown could continue into May", said Tai Hui at JP Morgan Asset Manment.

"This isn't surprising, given flights are grounded and people are driving much less for work and leisure. If ecomic reopening takes longer than expected, we could see pressure furr out in futures curve." He added that firms were still churning out oil because stopping output "is t feasible for some producers since it could permanently dam ir oil fields. Hence, giving ir oil away for one month could still make sense in long run."

Oil markets have been ravd this year after pandemic was compounded by a price war between Saudi Arabia and Russia. While two have drawn a line under dispute and agreed with or top producers to slash output by almost 10 million barrels a day, that is t eugh to offset lack of demand.

Equity markets were deep in red, having enjoyed a healthy couple of weeks thanks to massive stimulus measures and signs of an easing in rate of new infections globally. Tokyo ended two per cent lower, while Hong Kong shed 1.9 per cent and Sydney dropped 2.5 per cent with Mumbai more than three per cent lower.

Shanghai sank 0.9 per cent while Seoul was down a similar amount and Taipei retreated 2.8 per cent. Singapore, Jakarta and Bangkok lost more than one per cent, and re were also big losses in Wellington and Manila.

In early trade, London, Paris and Frankfurt tumbled. losses came despite signs that virus, which has infected almost 2.5 million people and killed 170,000, is easing as global lockdowns begin to take effect, allowing some countries to slowly return to rmality.

Analysts warned drop in stocks could be an indication that recent surge may have been too much too quick and ar sell-off is possible. flight to safety was reflected in currency markets, where dollar soared against high-yielding, riskier units.

Australian and New Zealand dollars and Russian ruble were all down more than one per cent, while Indonesian rupiah sank 0.9 per cent. South Korean won came under extra pressure following reports about Kim. CNN cited a US official saying Washington was "monitoring intelligence" that leader was in "grave danger after a surgery".

report did t specify what intelligence was. "If rth Korean news proves to be correct, region is set for a period of uncertainty," said OANDA's Jeffrey Halley.

"Kim Jong-un was its leader for life, and he had weeded out a goodly number of potential rivals already. That leaves a nuclear-armed rth Korea with giant armed forces facing a potentially messy succession process. China will also want to have its input into process, forcefully if necessary."

(Im credits: AP)