TOKYO: Oil prices were set for their worst weekly drubbing since the 2008 financial crisis, despite rising over 3 per cent on Friday, as investors fretted over evaporating demand from the coronavirus pandemic and a production ramp-up by top producers.
Brent crude LCOc1 was up $1.12, or 3.4 per cent, at $34.33 a barrel by 0728 GMT after falling more than 7 per cent on Thursday. For the week, Brent is set to fall around 24 per cent, the biggest weekly decline since December 2008, when it fell nearly 26 per cent.
US West Texas Intermediate (WTI) crude CLc1 rose $1.17 cents, or 3.7 per cent, to $32.66 per barrel after falling more than $1 earlier in the session. WTI is set to drop nearly 21 per cent this week, also the most since the height of the financial crisis.
“It’s been a very rough week and so it’s not impossible people are locking in ahead of the weekend,” said Michael McCarthy, chief market strategist at CMC Markets in Sydney.
“I would also point out that in the context of the recent moves it’s not really a major move,” he added, noting that “volumes are terrible” and down significantly on average.
A flood of low-priced oil from Saudi Arabia, the world’s largest exporter, and the United Arab Emirates is intensifying the pressure on prices after the collapse of a price supporting agreement with Russia last week.
“The surge in low-cost production is significantly larger than expected with the collapse in demand due to the coronavirus looking increasingly broad,” said Goldman Sachs, which now expects what it said would be a record high oil surplus of 6 million bpd by April. — Reuters
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