Oil prices were set for their worst weekly drubbing since the 2008 financial crisis, despite rising over 3% on Friday, as investors fretted over evaporating demand from the coronavirus pandemic and a production ramp-up by top producers.
Brent crude was up $1.12, or 3.4%, at $34.33 a barrel by 0728 GMT after falling more than 7% on Thursday. For the week, Brent is set to fall around 24%, the biggest weekly decline since December 2008, when it fell nearly 26%.
U.S. West Texas Intermediate (WTI) crude rose $1.17 cents, or 3.7%, to $32.66 per barrel after falling more than $1 earlier in the session. WTI is set to drop nearly 21% 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.
Just as travel bans, cancelled events and other economic disruptions eat into crude demand, major oil producers are planning to add more crude to an oversupplied market.
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.
Russia, the world’s second-largest producer, does not appear willing to return to its agreement with the Organization of the Petroleum Exporting Countries (OPEC).
Domestic oil producers met with Russian Energy Minister Alexander Novak on Thursday but did not discuss returning to the deal, with the head of Gazprom Neft saying they plan to raise output in April.