Oil heads for third straight weekly slide

Oil heads for third straight weekly slide

Oil heads for third straight weekly slide

A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019.

Major global energy producers have suffered a historically unprecedented glut in crude oil supplies this month amid the economic downturn caused by the coronavirus, with net importer China taking advantage of rock bottom prices to stock up its strategic reserves.

On Friday, the 24th of April 2020, both U.S. and UK crude had rounded off the day in a fairly upbeat note, but reported a decline in an action-packed week that had witnessed the USA crude futures' plunging by as many as negative $40 per barrel, as an OPEC+ agreement to slash global crude oil production by 9.7 million barrels per day or almost 10 per cent of the world's entire crude output had been largely overshadowed by the demand strains stemmed from the global-scale pandemic outbreak that had plunged the United States' factory activity to a 74-year-low last month.

USA energy firms cut the most oil rigs in a month in April since 2015, according to energy services firm Baker Hughes Co.

Oil prices collapsed in early March, following a fateful OPEC+ meeting in Vienna where Saudi and Russian energy officials failed to come to an agreement on how much supplies should be cut by amid the COVID-19 pandemic.

Last week, in a historic first, oil futures for the month of May briefly traded at negative prices in a signal that there was more oil on the market than it was physically able to bear.

This week's declines will mark the eighth week of losses out of the last nine weeks.

With that said, remains to be seen if the recent slowdown in U.S. crude output will help to rebalance the energy market as weekly field production continues to fall back from a record high (13,100K), with output narrowing to 12,200K from 12,300K in the week ending April 10.

"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.

But with global storage space filling fast and oil demand shrinking by around 30%, those shut-ins are too little to rebalance the market.

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