Oil futures on Friday headed higher for a third straight session, but with U.S. prices on track for a more than 30% weekly loss as commodity investors attempted to take stock of a historic collapse in prices that cast a spotlight on problems of oversupply and dwindling storage in the energy complex, MarketWatch said in a report.
After the now-expired May NYMEX contract on Monday fell into negative territory for the first time ever, meaning that sellers had to pay buyers to take crude off their hands, market participants have been struggling to manage the unprecedented volatility.
“Any meaningful recovery in oil prices is unlikely to last after the utter chaos witnessed earlier this week,” said Lukman Otunuga, senior research analyst at FXTM. “Oil weakness is set to remain a major theme in Q2 given the overwhelming drop in demand, fears around slowing global growth and lack of storage space.”
“At this point, anything and everything is on the cards for both WTI & Brent, and this sentiment will most likely be reflected in price action moving forward,” he told MarketWatch.
June West Texas Intermediate crude, the U.S. benchmark grade, gained 51 cents, or 3.1%, at $17.01 a barrel, but the contract traded as low as $15.64 in the overnight session. On Thursday, WTI surged nearly 20%, adding to similar gains the session prior.
Gains on Friday would mark a third straight advance for the international and U.S. grade oils and would represent the longest such streak since a similar stretch ended March 25.
Despite those outsize gains, WTI is still set for a roughly 32% decline for the week, based on the June contract. A weekly loss for front-month crude of more than 29.46% would be the biggest weekly percentage loss since the period ended January 18, 1991, according to Dow Jones Market Data.
June Brent crude, the international benchmark, rose 33 cents, or 1.6%, at $21.66 a barrel on ICE Futures Europe, after gaining 4.7% on Thursday. For the week, June Brent is set to decline nearly 23%.