Assurances by the energy ministers of Saudi Arabia and Russia that they were willing to do more to support the oil market — on top of last weekend’s agreement by world producers to cut nearly 10 million barrels per day of supply — did not do much for crude prices either.
The front-month contract in West Texas Intermediate, the New York-traded benchmark for US crude, tumbled to as low as $17.31 per barrel — marking a bottom since 2001 — as it headed for delivery. The contract settled at $18.27, down 8 percent for Friday and 18.5 percent lower for the week.
June WTI, next in line to be the spot contract, settled at $25.03 per barrel — a near $7 disparity to May WTI due to woeful demand for prompt delivery crude.
Brent, the London-traded global benchmark for crude, performed better than US crude on Friday, though just modestly. Brent's front-month, which has already moved to June, settled at $28.08 per barrel, up almost 1 percent on the day. For the week though, it was down 11.5 percent.
The White House released on Thursday guidelines that US state governors could use in reopening businesses shuttered for four weeks amid attempts by authorities stem the outbreak of the COVID-19, which has already infected more than 680,000 Americans and killed nearly 35,000 of them.
Alexander Novak and Abdulaziz bin Salman, the energy ministers of Saudi Arabia and Russia, respectively, said in a joint statement that they will "continue to closely monitor the oil market and are prepared to take further measures jointly with OPEC+ and other producers if these are deemed necessary".
Despite a near 10-million-barrel-per day production cut agreed on Sunday by the Organisation of the Petroleum Exporting Countries and its allies, crude prices continued to fall this week on concerns that actual loss of demand to the pandemic could be as high as 30 million bpd.
"Plunging global demand and an inadequate OPEC+ production cut mean that gains on either contract are limited at best", said Jeffrey Halley, markets analyst at OANDA in New York.
Crude prices could, however, get a bump-up in the coming week from the oil rig count published by industry firm Baker Hughes on Friday, which showed a drop of 66 rigs this and 245 over the past weeks. The rig plunge indicated output cuts undertaken by US oil production due to WTI's free-fall.