Crude steadies in Asia trade after overnight plunge

0210 GMT: Crude oil futures steadied in mid-morning trade in Asia Wednesday after an overnight plunge, though analysts said that weaker demand prospects were likely to cap further recovery.

At 10:10 am Singapore time (0210 GMT), ICE Brent May crude futures were up 25 cents/b (0.87%) from Wednesday's settle at $28.98/b, while the NYMEX April light sweet crude contract was 7 cents/b (0.26%) higher at $27.02/b.

Both markers settled at multi-year lows Tuesday. Front-month ICE Brent was last cheaper in December 2004, while the NYMEX light sweet crude contract fell to its lowest since May 2003.

Global oil demand prospects have taken a hit amid the spread of COVID-19, while concerns lingered over growing OPEC+ supply.

"Coupled with border closures and quarantines getting implemented around the world, the demand prospect [is] looking even more dismal today as everyone rushes to revise demand growth lower," AxiCorp's chief market strategist Stephen Innes said Wednesday.

"And if you needed more reason to sell, Saudi Aramco's Q4 conference call confirmed Saudi Arabia's continuing intention to raise production to maximum levels of 12 million b/d," Innes added.

Saudi Arabia's energy ministry Tuesday said the kingdom will increase its crude exports to more than 10 million b/d over the next few months.

That would be a significant boost from December's 7.37 million b/d, based on the latest figures reported by the Joint Organizations Data Initiative.

"Volatility is likely to remain high in commodity markets as the investors try to make sense of the economic impact of COVID-19," ANZ analysts said Wednesday.

Fears of a virus-induced recession were being raised as governments stepped up efforts to contain the spread of the virus, the analysts added.