Brent, the London-traded global benchmark for crude, settled Friday's trade down $1.49, or 5 percent, at $26.98. USA production quotas could create a $5 to $10 upside to Goldman Sachs' West Texas Intermediate price forecast of $40 to $45 a barrel in 2021, the bank said.
US gasoline futures fell more than 20 per cent to $0.4789 a gallon, the lowest on record. Oil has been whipsawed this week as investors weigh further stimulus measures to combat the impact of the coronavirus pandemic against collapsing demand and an impending supply flood from the world's biggest crude producers. As a support measure for US drillers, the administration plans to initially purchase 30 million barrels for the Strategic Petroleum Reserve in May and June, and buy as much as 77 million barrels of oil in total over time.
Oversupply is so extreme that regulators in Texas considered curbing production there for the first time in almost 50 years.
Oil kept climbing after its biggest ever single-day gain as U.S. President Donald Trump waded into the price war between Saudi Arabia and Russian Federation that has rocked crude markets amid slumping demand.
This year is still on course to suffer the biggest drop in oil demand since reliable records started in the mid-1960s.
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Many oil companies have rushed to cut spending and shareholder payouts while refiners worldwide are slashing production or considering cuts as demand for fuel evaporates.
The six-month spread of Brent futures LCOc1-LCOc7 hit its steepest since 2009 at a discount of more than $9, a contango structure which reflects the current oversupply.
Prices of the WTI are fading the initial move to the area above the $28.00 mark per barrel and have returned to the $24.00 neighbourhood at the time of writing, or daily lows.
Swiss bank Julius Baer saw oil prices recovering to above $30 a barrel by mid-year, but added that they will likely continue to swing wildly in the very near term.