U.S. West Texas Intermediate and international-benchmark Brent crude oil futures are edging higher on Friday. The move is being fueled by stronger demand for risky assets after U.S. equity markets soared on the opening. There is also a little growing optimism that demand in Asia, especially from China, may start to pick up over the near-term as the number of new coronavirus cases in the country starts to decline.
Despite the strength at the end of the week, the markets are expected to finish the week with their worst performance since the 2008 financial crisis. Concerns continue to be driven by global demand worries and production increases from several OPEC members.
The markets gapped lower on Monday, pressured by the threat of a flood of cheap oil after Saudi Arabia announced that it would increase production on April 1 and lower export prices substantially. The moves are in retaliation to Russia’s balking at a deal with OPEC+ to reduce output.
Prices were also pressured after U.S. President Donald Trump said the United States will suspend all travel from Europe as he unveiled measures to contain the coronavirus epidemic. The travel ban, which excludes Britain, will hit U.S. airlines “extremely hard”, their industry association said. The surprise move is likely to mean a further drop in demand for jet and other fuels in an already battered oil market, although just how much is hard to quantify.
US EIA Cuts 2020 Oil Demand Growth…