Pavel Molchanov, Raymond James director and energy equity research analyst, joins ‘The Exchange’ to discuss the state of the market after the ongoing oil war between Saudi Arabia and Russia sent crude plunging.
Meanwhile, oil prices saw some respite Tuesday. U.S. West Texas Intermediate crude futures were up 10.4% at $34.36 per barrel.
That came after a shocking all-out oil price war roiled markets already on edge about the economic fallout from the fast-spreading coronavirus. Oil posted its worst day since 1991, with the WTI plunging more than 24% Monday, after Saudi Arabia slashed crude selling prices for April following the collapse in OPEC talks.
Monday’s monster sell-off triggered a key market circuit breaker that resulted in a 15-minute pause in trading early in the session.
Investors sought out on Monday safer assets amid additional fears that the coronavirus will disrupt global supply chains and tip the economy into a recession. The yield on the benchmark 10-year Treasury note dropped below 0.5% for the first time ever, while the 30-year rate breached 1%. At one point early Monday, the 10-year slid to 0.318%.
Treasury yields rebounded on Tuesday, with the 10-year rate hovering above 0.6% while the 2-year yield traded at 0.48%. The 30-year bond yield climbed back above 1% to trade at 1.133%.
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