Oil prices continued to rise, Friday, but are heading to record their first weekly loss in three weeks, as the impact of fears of inflation and slowing global growth due to the closures in China to combat the pandemic, outweighed the impact of concern about dwindling fuel supplies from Russia.
Brent crude futures rose $1.81, or 1.7 percent, to $109.26 a barrel by 04.03 GMT. US West Texas Intermediate crude futures rose $1.55, or 1.5 percent, to $107.68 a barrel, reports a local Arabic daily quoting Reuters.
However, both benchmarks contracts are heading towards recording a weekly decline, with Brent crude expected to drop by about three percent and US crude to fall by about two percent.
The market remains volatile, with the European Union possibly imposing a ban on Russian oil supplies, leading to supply shortages, and concerns about faltering global demand.
Stephen Innes, managing partner at SBI Asset Management, said oil traders were looking for “a glimmer of light at the end of the bleak Chinese shutdown tunnel”.
“However, we always go back to the starting point with the comparison between the decline in the number of cases and the increase in the authorities’ adherence to the zero-Covid policy,” he added.
Inflation and a sharp rise in interest rates pushed the US dollar to its highest level in 20 years, limiting the gains in oil prices, as a higher dollar makes oil more expensive to buy in other currencies.
But analysts continue to focus on a possible European Union embargo on Russian oil after Moscow imposed sanctions this week on European units of state-owned Gazprom and after Ukraine blocked a major gas transit route.
“With natural gas prices rising in Europe, it is inevitable that some of the impact will spill over to oil,” Jeffrey Halley, chief market analyst at Oanda, said in a note.
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