Picture: 123RF/EVGENI BASHTA
Picture: 123RF/EVGENI BASHTA

London — Oil prices fell on Friday as a rise in new cases of coronavirus and weak Asian economic data fueled uncertainty about the economic outlook and as major crude producers showed no rush to cut output.

Brent crude was down 96c, or 1.6%, at $58.35 a barrel by 10.19am GMT, while US crude dropped 76c, or 1.4%, at $53.12 a barrel.

Oil prices had edged up on Thursday after a much smaller-than-expected rise in US crude stocks.

“With Brent failing to breach the $60 level on Thursday, despite better-than-expected US oil inventory data, rising market uncertainty is dragging down oil prices on Friday,” said UBS oil analyst Giovanni Staunovo.

“Market participants who benefited from the price rise in recent days might prefer not to go into the weekend with a long position due to the renewed uncertainty,” he said.

Finance leaders from the G20 major economies will meet in Saudi Arabia over the weekend to discuss risks to the global economy, as new Asian economic and health data keeps investors on guard.

China reported an uptick in new cases of coronavirus on Friday, with more than 200 people testing positive in two prisons.

Factory activity in Japan suffered its steepest contraction in seven years in February, hurt by fallout from the virus outbreak.

“We still believe that the market is likely to trade lower from current levels, given the scale of the surplus over the first half of this year, and the need for the market to send a signal to [oil cartel and its allies, led by Russia], Opec+ that it must take further action at its meeting in early March,” said ING analyst Warren Patterson.

Russian energy minister Alexander Novak said on Thursday that global oil producers understood it would no longer make sense for Opec+ to meet before the gathering.

Opec+ has been withholding supply from the market to support prices for several years now. Many analysts expect an extension or deepening of the curbs.

Adding to pressure on oil prices was the strength of the dollar. A stronger greenback typically makes oil more expensive for holders of other currencies, as the commodity is usually priced in dollars.

Reuters