Crude remains lower on bearish drivers

Singapore — 0230 GMT: Crude oil futures fell in midmorning trade in Asia Friday as bearish demand and supply indicators continued to underpin market outlook.

At 10:30 am Singapore time (0230 GMT), ICE Brent May crude futures were down 29 cents/b (0.87%) from Thursday's settle at $32.93/b, while the NYMEX April light sweet crude contract was 45 cents/b (1.43%) lower at $31.05/b.

Demand has taken a substantial hit amid the coronavirus pandemic, while a looming supply glut due to a lack of OPEC+ consensus also dampened sentiment.

"With jet fuel demand falling off a cliff and recessionary fears moving like a wrecking ball through the oil industry, oil prices continued their descent in the abyss overnight and are now on track for a greater than 25% this week," said AxiCorp's chief market strategist Stephen Innes Friday.

The World Health Organization declared COVID-19 a pandemic Wednesday, with cases surpassing 118,000 in over 110 countries and territories and amid risk of further global contagion.

"Volatility is expected to remain high as governments tackle the spread of COVID-19. Oil markets are likely to suffer the most as travel restrictions tighten," said ANZ analysts Friday.

US equities plunged Thursday amid a lack of clarity on fiscal stimulus, even as travel restrictions tightened after President Donald Trump's travel ban from Europe.

"Expect prices to remain suppressed as uncertainty remains high," said OCBC analysts Friday.

Supply factors also lent further downside risk to crude prices, with no cuts seen for both the US and OPEC production.

US production hit a near-record high at 13.1 million b/d the week ended March 6, the US Energy Information Administration data showed, largely due to increases in shale production.

Saudi Arabia and Russia have also indicated that they would expand supply after the existing OPEC+ deal expires at the end of March.

Saudi Aramco said earlier this week that it was able to hike its maximum sustainable capacity by 1 million b/d to 13 million b/d.

OPEC+ talks aimed at extending output cuts to deal with the price impact of the coronavirus outbreak fell apart last week.