Oil heads for another weekly slide on coronavirus turmoil

NEW YORK: 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.

Brent 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.

Continental Resources Inc, the largest oil producer in North Dakota, has halted most of its production in the US state and notified some customers it would not supply crude, people familiar with the matter said.

"After the price crash earlier this week, which seems to have made every person on the planet aware of the problems in the oil market, several relevant announcements of active crude production shut-ins have made the rounds," JBC Energy said.

But with global storage space filling fast and oil demand shrinking by around 30 per cent, those shut-ins are too little to rebalance the market. Onshore oil storage is currently filled to nearly 85 per cent capacity, according to energy research firm Kpler.

In China, where the coronavirus outbreak started late last year, analysts said fuel sales should pick up in the second quarter as Beijing eases curbs to contain the pandemic.