Oil heads for weekly loss with virus fears, oversupply

Crude oil prices were heading Friday for weekly losses as measures against coronavirus (Covid-19) around the world keep global oil consumption low and rising glut of supply keeps downward pressure on prices.

Price of Brent crude was trading at $25.81 per barrel at 1200 GMT on Friday heading for a 3.5% weekly decline after the international benchmark opened Monday at $26.75 a barrel.

American benchmark West Texas Intermediate (WTI) was trading at $22.41 a barrel at the same time, heading for a slight weekly loss of 0.5%, after starting the week at $22.52 per barrel.

With coronavirus reported in 176 countries, total infected number of people is above 542,700, while the death toll exceeded 24,300. The U.S. now has over 85,900 confirmed Covid-19 cases, followed by China with more than 81,800, and Italy with over 80,500.

In the U.S., the world's largest oil consumer, the House of Representatives will vote later Friday for a $2 trillion aid package, the largest stimulus legislation in the country's history, after it passed the Senate with a 96-0 vote late Wednesday.

If approved, the package aims to provide stimulus for the world's biggest economy, and it could revive its oil consumption and later the global oil demand.

Global rating agency Moody's said Thursday it expects oil prices to remain low throughout this year before the global oil market begins to rebalance once oil supplies starts to fall.

'The worldwide economic damage from the coronavirus pandemic will persist into the second quarter of 2020, if not longer, before economic fundamentals improve in the second half,' Moody's said in a statement.

British multinational investment bank and financial services company Barclays on Tuesday lowered its oil price forecast by $12 per barrel for 2020. It estimates Brent crude to average $31 a barrel this year, it forecasts WTI to average $28 per barrel.

'Prices are likely to remain under pressure until the virus situation turns the corner, and if we continue on the projected market balances path, even Saudi Arabia and Russia will not be immune from the price fallout,' Barclays said in a note.

Barclays also said it forecasts an oversupply of more than 5 million barrels per day (bpd) in the global oil market this year, with the glut of supply estimated to peak at 10 million bpd on average during the second quarter of 2020.