2020.03.2319:23:00UTC+00Oil Futures Settle Sharply Higher On Fed's Extensive New Measures

Crude oil prices climbed higher on Monday, reacting positively to the Federal Reserve's announcement of extensive new measures to support the economy.

Still, concerns about the outlook for energy demand remained amid reports showing increased number of new cases of COVID-19 infection across the U.S. and several other parts of the globe.

West Texas Intermediate Crude oil futures for May ended up $0.73, or about 3.2%, at $23.36 a barrel.

On Friday, WTI crude oil futures contracts for April expired at $22.53 a barrel, losing $2.69, or about 11%, in the session. May contracts settled at $22.63 a barrel, losing more than 11%.

Earlier in the session, oil prices drifted lower as governments around the world extended nationwide lockdowns to combat COVID-19 last week, raising concerns about the impact on economic activity.

According to data from Johns Hopkins University, the number of confirmed coronavirus cases has climbed above 350,000 worldwide, with confirmed cases in the U.S. jumping above 35,000.

The Federal Reserve today announced extensive new measures, including an unlimited expansion of its asset purchases. The central bank said it will purchase Treasuries and mortgage-backed securities "in the amounts needed to support smooth market functioning and effective transmission of monetary policy to broader financial conditions and the economy."

The Fed had previously announced it would purchase at least $500 billion of Treasury securities and at least $200 billion of mortgage-backed securities. The central bank also announced the establishment of a new program that will provide up to $300 billion in new financing in an effort to support the flow of credit to employers, consumers, and businesses.

The Fed also slashed interest rates by 100 basis points last week, lowering the target range for the federal funds to zero to 0.25%.