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Futures in New York are down 18% this week. The crude surplus may reach a record high by April as the two former OPEC+ allies race to increase production, according to Goldman Sachs Group Inc. The market\u2019s structure has already returned to a super-contango, indicating a big oversupply.<\/p>\n
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At the same time, concerns over demand are continuing to grow. Gasoline prices fell by a fifth on Thursday as President Donald Trump issued a travel ban from Europe.<\/p>\n
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Crude recovered some of this week\u2019s losses on Friday, with equities\u00a0paring\u00a0Thursday\u2019s slump. Still, signs of fear abounded, with oil more volatile than during the financial crisis.<\/p>\n
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The schism between Moscow and Riyadh is hardening with Russian oil producers planning to ramp up production next month, and no plans for a detente with Saudi Arabia. The kingdom said earlier in the week that it would\u00a0boost output\u00a0by more than 25% in April, while it sends a flood of\u00a0crude to Europe, Russia\u2019s tradition market.<\/p>\n
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\u201cDemand is falling, refining margins are weakening, Saudi crude oil exports are surging: the super-contango is back,\u201d Petromatrix Managing Director Olivier Jakob wrote in a report. \u201cIt will be difficult for Saudi Arabia to regain control of the markets.\u201d<\/p>\n
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Governments and central banks have so far been powerless to stem the coronavirus-driven rout that\u2019s reverberating through financial markets and threatening a global recession. Trump has yet to offer a detailed economic rescue package, while the European Central Bank left interest rates unchanged, although it took steps to boost liquidity.<\/p>\n
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