Oil is up 2%, but is heading towards the largest weekly decline since 2008 by Reuters

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TOKYO (Reuters) – It is headed for its worst weekly drop since the 2008 financial crisis, although it rose 2 percent on Friday, as investors watched demand dampened by the Corona virus epidemic and an increase in production by major producers.

And rose 70 cents, or 2.1 percent, to 33.92 dollars a barrel by 0540 GMT, after falling more than seven percent on Thursday. For the week, Brent is headed for a decline of about 25 percent, the biggest weekly decline since December 2008, when it fell nearly 26 percent.

US West Texas Intermediate crude rose 80 cents, or 2.5 percent, to $ 32.30 a barrel after falling more than a dollar in the previous session. West Texas crude is on the decline by more than 25 percent since the beginning of the week, and it is also the largest decline since the height of the financial crisis.

While the travel ban, the cancellation of events and other economic turmoil are affecting demand for crude, major oil producers are planning to add more barrels to a market filled with supplies.

An abundance of cheap oil from Saudi Arabia, the world’s largest oil exporter, and the UAE are causing mounting pressure on prices after the collapse of a price-support agreement with Russia last week.

“The increase in low-cost production is much greater than expected, and the collapse in demand due to the Corona virus appears to be increasingly large,” Goldman Sachs said, and the bank now expects what it says will be a record high oil surplus of 6 million bpd by April.

Russia, the world’s second largest oil producer, does not seem willing to return to its agreement with the Organization of the Petroleum Exporting Countries (OPEC).

Domestic oil production companies met with Russian Energy Minister Alexander Novak on Thursday but did not consider returning to the agreement, while Gazprom chief denied that the company plans to increase production in April.

(Prepared by Moataz Muhammad for the Arabic Bulletin).

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