Oil prices fell for the fifth week in a row as investors tried to gauge the fallout from a coronavirus that has sickened thousands in China and tamped down demand in the world’s largest importer of oil.
Crude slid into a bear market on Monday, falling 20% from a recent peak in January, on worries about the virus’s effect on the global economy in a world flooded with oil. U.S. crude rose Wednesday and Thursday as the Organization of the Petroleum Exporting Countries and its allies met to debate a possible reduction in crude output. However, the cartel hit a snag when Russia rejected the Saudi-led effort to deepen OPEC’s oil-production cuts.
West Texas Intermediate futures fell 1.2% to $50.32 a barrel on Friday, while Brent, the global gauge of prices, fell 0.8% to $54.47 a barrel.
The OPEC headquarters in Vienna. Russia rejected a Saudi-led effort to deepen the cartel’s oil-production cuts in response to the coronavirus in China.
Photo: leonhard foeger/ReutersAnalysts are forecasting sizable cuts to oil-demand growth as a result of the coronavirus, with JPMorgan Chase & Co. slashing its global forecasts for the first quarter to 500,000 barrels a day from 1.15 million barrels a day. Investors are hoping the cartel and its allies will come to an agreement sometime next week.
“Overall, our neutral trading bias of this week is keeping us in a frame of mind in which we can construct a case for a WTI advance to about the $54 mark next week as easily as we can build an argument for a drop into fresh lows to around the $46 area,” analysts at Ritterbusch & Associates wrote in a Friday note.
Elsewhere in commodities, natural-gas futures fell 0.2% to $1.858 per million British thermal units after hitting four-year lows earlier this week. A mild winter has weighed on prices of the commodity, and analysts have little hope for a weather-driven recovery as the season wanes and models continue to predict warmer temperatures.
Write to Sarah Toy at sarah.toy@wsj.com
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