Oil falls for third straight day, Brent crude set for worst week since 1991

Oil prices fell on Friday for a third day, with Brent crude set for its biggest weekly drop since 1991 and US crude heading for the worst week since 2008 as panic about plunging demand from the coronavirus outbreak grips the market.

Brent crude was down 67 cents, or 2 per cent, at $32.55 a barrel by 01:26 GMT after falling more than 7 per cent on Thursday.

For the week, Brent is set to fall 28 per cent, the biggest weekly decline since the week of Jan 18, 1991, when it fell 29 per cent at the outbreak of the first Gulf War.

US West Texas Intermediate (WTI) crude was down 66 cents, or 2.1 per cent, at $30.84 after falling more than $1 earlier.

The contract fell 4.5 per cent in the previous session. WTI is set to drop 25 per cent this week, the most since the week of Dec. 19, 2008, when it fell 27 per cent at the height of the Global Financial Crisis.

A flood of low-priced oil into the market from Saudi Arabia and the United Arab Emirates is intensifying the pressure on prices after the collapse of a price supporting agreement with Russia last week.

"With the coronavirus triggering the first global oil demand drop in years, the surge of Saudi Arabian and Russian oil production could lead to a supply overhang of 4 million barrels per day," Eurasia Group said.

Four million barrels is about 4 per cent of daily global consumption before the coronavirus outbreak that started in China.

Oil prices were also impacted by record declines in equity markets with Japan's Nikkei 225 falling by 10 per cent on Friday after US markets fell by the most since Black Monday in 1987 on Thursday.

US President Donald Trump announced a ban on travel to the United States from Europe that sent the markets swooning as everything from sporting events to weddings were cancelled across many parts of the world with the coronavirus spreading to more countries.