By Barani Krishnan
Trading in crude remained volatile on Friday on conflicting reports about how the world’s major producers were adapting to the market’s biggest crisis in decades, as oil prices headed for their second worst week since the financial crisis.
West Texas Intermediate, the New York-traded benchmark for U.S. crude prices, was down 66 cents, or 2.6%, at $25.25 per barrel by 1:07 PM ET (17:07 GMT). For the week, WTI was down 21%, following through with the previous week’s 23% slide.
Brent, the London-traded global benchmark for crude, was up 8 cents, or 0.3%, at $28.55. Brent showed a 16% loss on the week, after the previous week’s 25% drop.
The epic losses in oil come amid a perfect storm of demand destruction caused by the Covid-19 pandemic and a production hikes-and-markets-share tussle between Saudi Arabia and Russia.
In Friday’s session, WTI initially fell more than 7% on a Bloomberg report that Russia “will not blink” in its face-off with Riyadh.
But by afternoon in New York, WTI had pared losses to below 3% on a Wall Street Journal report that U.S. regulators, who represent the world’s largest oil producer, were set to open a dialogue with OPEC which could help foster a truce between the Saudis and Russians.
Mohammed Barkindo, secretary-general of the Organization of the Petroleum Exporting Countries, was set to talk on Friday with Ryan Sitton, the Texas railroad commissioner who oversees the biggest U.S. oil patch, the Journal reported.
WTI also pared losses after industry firm Baker Hughes reported that rigs actively drilling for oil in the United States had fallen by 19 this week to 664. While a lagging indicator, the weekly rig count is one of the most trusted predictors of U.S. crude production.
“Oil prices have rebounded in tandem with risk appetite over the last couple of days, coming off the lows of close to $20,” said Craig Erlam, senior market analyst at online trading platform OANDA.
“I don't expect a strong rebound in the near-term, with neither Russia or Saudi Arabia looking likely to blink, but we could now start to stabilize around these incredibly low levels,” Erlam added.
