Brent crude was down $1.68, or 1.6%, at $106.65 a barrel. US West Texas Intermediate (WTI) crude was down $1.72, or 1.7%, at $102.07.
Oil slipped after a weekly loss of nearly 5% on Friday due to weak global growth, higher interest rates and the COVID-19 lockdown in China, while the European Union considers sanctions on Russian oil that would tighten supplies.
Brent crude was down $1.68, or 1.6%, at $106.65 a barrel. US West Texas Intermediate (WTI) crude was down $1.72, or 1.7%, at $102.07.
Global benchmark Brent rose to $139 a barrel last month, its highest price since 2008, but both oil benchmarks fell nearly 5% this week on demand concerns.
The International Monetary Fund, which this week cut its global economic growth forecast for 2022, said the agency’s No. 2 official said that if Western nations expand their sanctions against Russia over its war against Ukraine, and energy shortages. If prices increase further, it can be further reduced.
The German government will cut its growth forecast for 2022 to 2.2% from 3.6%, a government source said, while Chinese demand for gasoline, diesel and aviation fuel is expected to fall 20% in April from a year ago, Bloomberg reported, many of China’s biggest cities, including Shanghai, are in COVID lockdown.
Federal Reserve Chairman Jerome Powell said Thursday that a half-percentage hike in US interest rates “will be on the table” at the next Fed policy meeting in May, pushing the dollar to a two-year high. A strong greenback makes oil and other commodities more expensive for those holding other currencies.
“At this stage, fears over China’s growth and the Fed’s limiting US growth appears to balance concerns that Europe will soon increase sanctions on Russian energy imports,” said Jeffrey Haley, analyst at brokerage OANDA.
Speculators’ net long bets on the US dollar fell for the third straight week, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday.
supply tightness
On the supply side, the Russia-Kazakh Caspian Pipeline Consortium (CPC) is expected to resume full exports from April 22 after a disruption of about 30 days, sources said.
The number of US oil rigs this week increased by one to 549, the highest since April 2020, according to a Baker Hughes Company report.
Still, supply tightness provided support as disruptions in Libya lead to a loss of 550,000 barrels per day (bpd) of production. If the EU imposes sanctions on Russian oil, there could be a further reduction in supply.
An EU source told Reuters this week that the European Commission was working to accelerate the availability of alternative energy supplies, while a senior White House adviser said he was confident that Europe would continue to export the remaining Russian oil and gas. determined to close or further restrict.
The Netherlands said it plans to stop using Russian fossil fuels by the end of this year.
Morgan Stanley raised its third-quarter Brent price forecast by $10 a barrel to $130 this year, citing “more losses” due to short supplies from Russia and Iran, likely to outweigh short-term demand headwinds. Is.
European refiners processed 9.04 million barrels per day of crude in March, down 4% from a month earlier and 4.8% more than a year ago, Euroilstock data showed.
US oil refiners are expected to have about 1.08 million bpd of capacity offline for the week ended April 22, research company IIR Energy said, adding 47,000 bpd to available refining capacity.
“While we may slide, there is a certain point at which we will find support because fundamentals here are too tight to slide that far,” said Robert Yeager, executive director of Energy Futures at Mizuho.
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