Oil heads for another weekly slide on coronavirus turmoil

Oil heads for another weekly slide on coronavirus turmoil

Barring any steep jump the rest of the session on Friday, prices are heading for their eighth weekly loss in the last nine, one of the most volatile weeks in the history of oil trading, with nearby expiring May U.S. West Texas Intermediate falling into negative territory to minus $37.63 a barrel on Monday, while Brent fell to a two-decade low.

US energy firms cut the most oil rigs in a month in April since 2015, according to energy services firm Baker Hughes Co.

The price of oil recovers from the collapse in the May futures contract, but the economic shock from COVID-19 may continue to drag on crude as the Great Lockdown disrupts global demand, with the oil surplus raising the cost of storage.

After trading near unchanged for most of the day, the benchmarks rebounded in the afternoon after energy services firm Baker Hughes Co (BKR.N) said producers in April cut the number of active USA oil rigs by the most in a month since 2015.

Oil futures marked their third straight week of losses, with Brent ending down 24 percent and WTI off around 7 percent. Citing statistics, on Friday's market closure, United Kingdom crude rose by 0.5 per cent to $21.44 a barrel, while the US West Texas Intermediate crude futures' prices gained 2.7 per cent to $16.94 per barrel.

The collapse in oil prices comes in spite of the agreement by OPEC+ and partner nations earlier this month to cut oil output by some 9.7 million bpd through June to try to end the glut. Riyadh then added fuel to the fire by announcing deep discounts in April contracts and promising to ramp up production by over 20 percent, with other countries following suit as traders bought up the cheap oil and put it in storage in hopes of making a profit as prices stabilized.

"Despite the measures taken by OPEC, oil producers in various countries should be aware that they may be called to take more drastic measures", Diamantino Azevedo, Angola's resources and petroleum minister, told state news agency ANGOP on Friday.

Russian Federation plans to halve oil exports from its Baltic and Black Sea ports in May, according to the first loading schedule for crude shipments since it agreed to cut output.

But with global storage space filling fast and oil demand shrinking by around 30%, those shut-ins are too little to rebalance the market.

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