Oil prices rose for the fourth day in a row on Friday as fears of Russian supply disruption trumped fears of Covid-19 lockdowns in China, the world’s biggest oil importer.
At 111:5 GMT, futures on the Brent gained $2.16, or 2.01%, at $109.75 a barrel, after gaining 2.1% a day earlier, while West Texas Intermediate in the United States advanced $1.26, or 1.2%, to $106.63, after improving by 3.3 % Thursday.
Both contracts are set to end the week higher and post their fifth consecutive monthly rise, buoyed by the increased likelihood that Germany will join other European Union countries in an embargo on Russian oil.
However, oil prices have remained volatile as China shows no signs of easing its lockdown measures despite the hit to its economy and global supply chains.
“With the full and partial lockdowns intensifying since March, China’s economic indicators have plunged further into the red. We now expect China’s GDP to slow down further in the second quarter,” Yanting said in a note. Zhou, from APAC from Wood Mackenzie.
Oil market volatility is set to continue, with the possibility of more widespread and prolonged shutdowns in May and beyond, skewing near-term risks to Chinese oil demand – and prices – to the downside,” he added.
On the supply side, it is likely that the OPEC+ stick to its current deal and agree another small production increase for June when it meets on May 5, six sources at the producer group told Reuters on Thursday.
However, Russian oil output could fall as much as 17% this year, according to an Economy Ministry document seen by Reuters on Wednesday, as Western sanctions over Russia’s invasion of Ukraine hurt investments and exports.
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