Brent Crude futures fell below $55 per barrel on Friday as major futures recorded a fifth consecutive weekly loss, with Russia saying it was not ready to adhere to cuts recommended to help the global market affected by the spread of the coronavirus.
On the back of this, Brent crude shed 46 cents or 0.84 percent to trade at $54.47 per barrel, while the WTI crude fell back to the $50 mark after losing 61 cents equivalent to 1.2 percent to trade at $50.32 per barrel.
In the latest development concerning the coronavirus, over 630 people have been confirmed dead and this continues to affect demand with more than 31,000 cases of the deadly pneumonia like virus in the country of China, the world’s largest importer of oil.
The Organisation of the Petroleum Exporting Countries (OPEC) and its allies are seeking to extend oil cut up to 2.3 million barrels per day till June 2020 to help prices which are hit by the virus spread.
After a three-day extended dialogue between members of the cartel, there was a suggestion for extra 600,000 barrels per day, but Russia Energy Minister, Mr Alexander Novak, said the leader of the OPEC allies needed more time to assess the situation and was not ready to commit.
He also estimated that global demand would drop by 150,000 to 200,000 barrels per day this year due to the epidemic that originated in Wuhan City, China last December.
It is known that Russia is more interested in extending the period of the current cut of 1.7 million barrels per day till June not that which will see an additional 600,000 bpd. This is however subject to approval by producers in OPEC+ who are to meet in Vienna on March 5-6, although the meeting could be brought forward because of concerns surrounding the virus.
The effect of the virus on dwindling prices is more important than many analysts believe as even a strong growth in US employment failed to help the market as it normally would. A report on US employment on Friday showed that the economy added 225,000 jobs in January
