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Oil prices rose on Friday, but both the Brent and US benchmarks were on track for their third straight week of losses as global production shutdowns failed to keep pace with the collapse in demand caused by the coronavirus pandemic.
The oil market has experienced unprecedented turbulence since US prices fell into negative territory on Monday for the first time ever and international benchmark Brent sank to two-decade lows. Investors have sold oil aggressively since early March, in response to a 30 per cent collapse in demand due to the pandemic.
This week’s declines will mark the eighth week of losses out of the last nine weeks. Brent is on track for a 24 per cent weekly drop and US West Texas Intermediate (WTI) is set for a fall of around 7 per cent.
rent futures rose 18 cents, or 0.8 per cent, to $21.50 a barrel by 11:57 a.m. EDT (1557 GMT), while US WTI rose 56 cents, or 3.5 per cent, to $17.06.
Storage is quickly filling worldwide, which could necessitate more cuts in production, even after the Organization of the Petroleum Exporting Countries and its allies agreed to cut output by 9.7 million bpd earlier this month. The global economy may still see a record contraction this year.
“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.
Russia 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 this month along with other major oil producers to cut output.