Fundamental Comment

Oil recovers slightly, yet set for sharp weekly loss

Oil recovers slightly yet set for sharp weekly loss

Oil prices recovered during Friday’s trading, supported by lower U.S. crude inventories, but set to record another weekly loss of up to five percent, amid widespread concerns about the impact of the Corona virus on global oil demand.

As of 07:47 GMT, Brent crude reached $62.16 per barrel, compared to the session’s open at $62.06 a barrel, while the highest level in the day was hit at $62.44 a barrel, to recover slightly after four consecutive sessions of decline.   

West Texas Intermediate (WTI) crude futures traded at $55.83 per barrel, after opening at $55.66 per barrel, set for its third straight weekly decline.

Black gold received some support as U.S. crude inventories fell last week and U.S. production stabilized at a record low, according to data from the U.S. Energy Information Administration.

U.S. oil production stabilized at 13 million barrels per day in the week ended January 17, remaining at an all-time high, the same as the previous week, according to a weekly report released on Thursday by the U.S. Energy Information Administration.

In the same vein, data from the general customs administration of China, the world's second largest oil importer and the second largest consumer in the world, yesterday showed that gasoline exports jumped by about 27 percent in 2019, reaching 16.37 million tons.

However, this week, oil prices are heading for a sharp loss of nearly five percent, amid fears of a Corona outbreak that could negatively affect crude demand and global economy.

Fears of the spread of the Corona virus in China, which has caused 25 deaths so far, have escalated and have negatively affected travel, fuel demand and economic prospects.

Meanwhile, the dollar index, which measures the performance of six major currencies against the US dollar, surged 0.04 percent at 97.52.

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