Oil was on its way to register its largest drop on weekly basis since the 2008 crisis despite a 5 percent ricochet upwards on Friday, as the Covid-19 outbreak jeopardized demand and crude producers pledged more supply cuts.
International Brent benchmark for crude futures with delivery in May soared by 6.92 percent, to $35,48 per barrel, but were still 23 percent down over the week – the biggest weekly drop since December 2008.
U.S. West Texas Intermediate futures with April delivery gained 7.17 percent, to $33,74 per barrel but was also units way to lose a 5h of its price over the week.
World stocks, meantime were also on track to register their weakest week since 2008, with the infection sparking selloffs across markets globally.
The additional pressure on oil rates, already knocked by the Covid-19 as fewer people travel and business events are limited, major oil producers were pumping more crude into the market.
Saudi, the world’s largest exporter, and the United Arab Emirates offered more to customers OPEC’s discussions with Russia and others on supply restraint collapsed last week.
Russia, the 2nd biggest oil producer, showed no interest in agreeing to deeper production cuts with OPEC members.
Oil producers from Russia met Energy Minister Alexander Novak prior day, but did not confer a return to the deal. The head of Gazprom Neft said it planned to increase production in April, following the discussion.
Goldman Sachs noted it now estimated a historic high oil surplus of 6 million bpd by April, in a global amount, as it is usually consumed about 100 million bpd worldwide.