Oil prices rebound on output cuts but set to end tumultuous week in the red

Brent was up 2.8 per cent, while the US West Texas Intermediate gained 4 per cent

Kuwait will begin cutting supplies to international markets without waiting for the official start of the Opec+ deal. AFP

Oil made up ground on Friday as some producers like Kuwait said they would move to cut output swiftly to try to counter the evaporation in global demand for fuels caused by the coronavirus pandemic.

Brent, the international benchmark, was up 2.8 per cent at $21.93 per barrel, while West Texas Intermediate, the US benchmark, gained 4 per cent reaching $17.16 per barrel.

But barring a sharper jump on the last trading day of the week, prices are heading for their eighth weekly loss in the last nine - one of the most tumultuous weeks in the history of oil trading, with the US WTI falling into negative territory on Monday, while Brent thudded to a two-decade low.

"The disruption relating to the coronavirus is set to cause the steepest fall in global GDP [gross domestic product] since the Second World War," Capital Economics said in a note, forecasting a 5.5 per cent contraction in global economies this year, dwarfing the 0.5 per cent fall seen during the global financial crisis.

"Once the virus is under control output should rebound, but it will take years to return to its pre-virus path," it said.

Under a deal agreed between the Opec and associated producers like Russia, a grouping known as Opec+, production cuts equal to 9.7 million barrels of oil per day are due to kick in from May.

But Kuwait's state news agency KUNA said on Thursday the producer will begin cutting supplies to international markets without waiting for the official start of the Opec+ deal.

Meanwhile Azerbaijan's Azeri-Chirag-Guneshli oil project will have to cut output sharply from May onwards as the oil producer fulfils its commitments under the deal to cut production, four sources told Reuters.