Brent ended with a loss of 1.55% at 106.65 dollars and WTI ended with a depreciation of 1.65% at 102.07 dollars.
Oil prices ended lower on Friday, struggling to recover sustainably as Shanghai’s lockdown continues to be extended, raising fears for Chinese demand for black gold.
A barrel of Brent from the North Sea for delivery in June lost 1.55% to 106.65 dollars.
The barrel of American West Texas Intermediate (WTI) for delivery the same month lost 1.65% to 102.07 dollars.
The Chinese economic capital is facing the worst Covid outbreak recorded in the country since the start of the pandemic. More than 17,000 new positive cases of coronavirus were still announced there on Friday, a figure however in decline.
“These Chinese confinements are a blow to global demand, it should be noted that China is the world’s largest importer of crude”, comments for AFP Han Tan, analyst at Exinity.
It is a toxic cocktail for the demand for black gold “when China slows down while the United States increases its rates”, abounds Stephen Innes, analyst at SPI AM.
A rise in US rates aims to slow inflation but weighs on economic activity and therefore consumption of black gold.
“Oil is also clearly coming under pressure from comments by Fed Chairman Jerome Powell, who sounded very hawkish in a conference at the IMF when he said… on the table+ for the May meeting,” noted Phil Flynn of Price Futures Group.
“Some fear that a 50 basis point rate hike might be the first in a long series and might slow the economy and oil demand,” the analyst added.
After a start to the year that took oil to multi-year highs, boosted by the war in Ukraine, prices have struggled to find a strong direction in recent weeks.
But Morgan Stanley analysts believe that “the risks on supply eclipse those on demand”, judging that there is “a high risk that the European Union will put in place an embargo on Russian oil”.
“We must be careful with a complete European ban on oil imports,” US Treasury Secretary Janet Yellen warned on Thursday, calling for reducing European dependence “without penalizing the entire planet”.
