Oil prices fell 1 per cent on Friday as Russia said it needed more time before committing to output cuts sought by other large producers while the coronavirus outbreak fanned worries about global crude demand.
Oil prices posted their fifth straight weekly decline, as speculators have backed away due to weaker consumption figures and expectations that the coronavirus, which has killed more than 600 people, will remain a drag on demand.
Brent crude futures lost 46 US cents, or 0.8 per cent, to settle at $US54.47 a barrel. Brent sank 6.3 per cent for the week.
West Texas Intermediate (WTI) crude futures fell 63 US cents, or 1.2 per cent, to settle at $US50.32 a barrel. The contract lost 2.4 per cent for the week.
This week, a panel advising OPEC+, the Organization of the Petroleum Exporting Countries and allies led by Russia, suggested provisionally cutting output by 600,000 barrels per day (bpd).
On Friday, Russia Energy Minister Alexander Novak said Moscow needed more time to assess the situation.
“Russia’s lack of commitment thus far to such a deal is providing one additional bearish element that is currently precluding the complex from sustaining price advances,” Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
Prices have fallen about a fifth since the outbreak of the virus in the Chinese city of Wuhan. China is the world’s biggest importer of crude, taking in roughly 10 million bpd in 2019.
Novak predicted global oil demand may fall by 150,000 to 200,000 bpd in 2020 in part because of the virus.
The OPEC+ group this year deepened existing cuts to roughly 1.7 million bpd, nearly 2 per cent of global demand, yet prices have remained in a narrow band.
Producers in OPEC+ are scheduled to meet in Vienna on March 5-6, although the meeting could be brought forward because of concerns surrounding the virus.
Forecaster Eurasia Group said it estimates a contraction in oil demand in China of as much 3 million bpd in the first quarter from 2019 levels.
Sources have told Reuters that Chinese policymakers are preparing measures, including more fiscal spending and interest rate cuts, amid expectations that the outbreak will have a devastating impact on first-quarter growth.
US eUSy firms added oil rigs for the third time in four weeks even though producers planned to continue reducing spending on new drilling for a second consecutive year in 2020.
Companies added 1 oil rig in the week to February 7, bringing the total count to 676, energy services firm Baker Hughes Co said on Friday.