By Srinivas Chowdary Sunkara // petrobazaar // 10th Feb 2020.
Brent futures prices for April delivery lost 46 cents or 0.84% on the London based ICE futures Europe exchange while WTI oil futures to be delivered in March dropped 63 cents to $50.32 a barrel on late week. In Shanghai, Crude oil main contact futures settled 2.7 Yuan or 0.66% down at 404.9 Yuan/barrel where as MCX current month crude oil futures closed Rs.13 down at Rs.3617 on Friday. Brent traded at a premium of $4.15 over WTI during the session.
The global crude oil futures dropped around 1% on Friday, while Brent registered a weekly loss of 6.3% and U.S crude logged in 2.35% loss for the fifth straight week. Oil prices have fallen about a fifth since the outbreak of corona virus in China that fanned global demand worries. Corona virus is expected to erase oil demand of 150K to 200K per day in 2020. Speculator group stayed away due to weaker consumption numbers. Money managers are reported to have cut down their net long U.S crude futures and options positions to the week to Feb 4th as per the U.S Commodity Futures Trading Commission.
On the supply side, Russia needed more time to give its nod to proposed deeper cuts of another 600000 barrels by OPEC+ that provided additional bearish element that is currently precluding the complex from sustaining price advances while the ex-Soviet country, Azerbaijan which contributes around 770Kbpd, likely to support the deeper cuts to balance the oil prices.Turning to weekly data, U.S drillers added another oil rig for the third time in four weeks. Today morning, Oil futures prices extended their decline during the Asian hours. Markets are expected to be sensitive to virus headlines and advised for defensive positioning.
Good day to all.
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