10:47 am
Saturday 14 March 2020
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Cairo – Agencies:
Oil prices sealed yesterday their worst week since the global financial crisis in 2008, affected by the outbreak of the Corona virus and the efforts of Saudi Arabia, the world’s largest crude exporter, and its allies to flood the market with record levels of supply.
The rare mix of supply and demand shocks has caused the crude market to collapse as producers around the world prepare for an unexpected oil glut in the coming weeks.
“It is an oil price war problem in the midst of a besieged market,” according to Reuters.
Global stocks are heading for their worst week since 2008, amid selling across the market driven by a panic fueled by the Corona virus. The virus has infected at least 138,000 people worldwide and has killed more than 5,000, disrupting corporate activities, markets and everyday life.
Major oil producers are pumping more crude into the market at a time of declining demand. Saudi Arabia has hired more than 30 giant crude carriers to export oil in the coming weeks, targeting in particular the large refiners dealing with Russian oil in Europe and Asia, in an escalation of its battle with Moscow on market shares.
Goldman Sachs said it had come to expect a record oil surplus of six million barrels per day by April, in a global market that normally consumes about 100 million barrels per day.
Prices rose on Friday, rebounding after the United States and other countries announced plans to support weak economies. But Brent crude fell 25% over the course of the week, in its biggest weekly loss since the global financial crisis in 2008. On Friday, Brent rose 63 cents to settle the settlement price at $ 33.85 a barrel.
US West Texas Intermediate crude futures fell about 23% over the course of the week, its biggest percentage loss since 2008. West Texas rose 23 cents to close at $ 31.73 a barrel, after rising earlier to $ 33.87.
On Friday, oil and stock markets drew some support from hopes of a US stimulus package that could ease the economic shock caused by the Corona virus.
“There is hope that all of this stimulus will bring stability to the economy, relieve some of the concerns about weak demand and keep parts of the economy strong enough to support oil prices,” said Phil Flynn, an analyst at Price Futures Group in Chicago.
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