Oil: weekly fall of almost 30% for WTI

New York barrels dropped 11% just this Friday and closed at $ 22.53. The London price drops 5% to 26.98 dollars.

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New York oil ended the week on a further sharp decline on Friday, posting weekly losses of nearly 30%, in a market depressed by a plummeting demand for coronavirus and an overabundant supply.

A barrel of WTI for delivery in April, which was the last day of trading in New York, finished at 22.53 dollars, accelerating its fall at the very end of the session. It fell about 11% or 2.69 dollars from Thursday’s close.

In London, a barrel of Brent North Sea crude for May delivery fell just over 5%, or $ 1.47, to $ 26.98. Over the week, it fell by more than 20%.

Black gold ends a trying week, which saw it take some of the worst plummets in its history, including Wednesday when the WTI collapsed 24%.

During the Asian session and in the first half of the European session on Friday, the courses were however supported by words from the President of the United States, Donald Trump, who said the day before ready to “act as a mediator to mitigate the oil supply war between Saudi Arabia and Russia, “said Naeem Aslam of Avatrade.

But this standoff that Ryad and Moscow have been waging since the failure of their negotiations at the last summit of the Organization of the Petroleum Exporting Countries (OPEC) in early March in Vienna has taken over, at a time when demand is undergoing the full impact of the Covid-19 pandemic accompanied by drastic measures taken by States to stem it.

“We are still not optimistic about an upcoming OPEC + supply limit deal, but the likelihood has improved this week,” said Jasper Lawler, analyst at London Capital Group.

American producers, for their part, are more and more worried about a clear shortfall and the impossibility of repaying their debts with a barrel whose cost is very much lower than the level which would allow them to be profitable.

Exceptionally, several oil companies in Texas, which accounts for 40% of production in the United States, have lobbied to reduce the extractions of this state in order to stem the inexorable fall in prices. Texas has not limited production since the 1970s.

“I am very concerned about the impact of the instability of the world oil market on the economy of Texas, its budget and the hundreds of thousands of Texans who rely on the oil and gas industries to be paid,” said Friday. in a statement Wayne Christian, the head of the Texas Railroad Commission, the body that regulates oil production in this state.

“Some operators have suggested that oil quotas could be the solution. Although I am open to all ideas to protect the Texas Miracle, as a conservative and free market advocate, I have several reservations about this approach, “he added.

Among his doubts, Mr. Christian explained that he was not sure that the other countries or even the other American states would follow Texas if he were to lower his production. He also cited a lack of resources to implement such a measure.

The US Department of Energy (DOE) has also made an initial request for 30 million barrels in Texas to fill US strategic reserves, according to an announcement made by Donald Trump last Friday.

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