Oil prices rose on Friday as a planned EU ban on Russian oil and easing of COVID-19 lockdowns in China counteracted concerns that declining economic growth would hurt demand.
Brent futures for July delivery rose 72 cents, or 0.6%, to $ 112.76 per share. on its last day as front-month.
The more actively traded WTI contract for July rose about 0.7% to $ 110.66 per barrel.
That put the Brent front-month premium over the same WTI contract on its way to falling to its lowest level since October 2021. A lower premium means energy companies will be less likely to pick up US barrels for export.
For the week, the WTI was heading for its fourth consecutive weekly rise for the first time since mid-February, while Brent rose about 1% after falling around 1% last week.
“The risks remain on the upside … given the Chinese reopening and continued efforts on a Russian oil embargo from the EU,” said Craig Erlam, senior market analyst at OANDA.
In China, Shanghai did not signal any change in its planned closure on an extended city-wide shutdown on June 1, although the city announced its first new COVID-19 cases outside quarantine areas in five days.
The energy market expects that the lifting of some coronavirus restrictions in Shanghai will increase energy demand. China is the world’s largest crude oil importer.
The EU is hoping to reach an agreement on a proposed ban on Russian crude oil imports, which includes exclusions for member states that are most dependent on Russian oil, such as Hungary.
“The likelihood of an EU embargo being declared sooner rather than later increased in the wake of Germany’s success in cutting Russian oil imports by more than half in a very short time,” the consulting firm BCA Research said in a note.
German big business is working out a plan to use an auction system to help ration out available supplies in the event that Russia shuts down its gas, though some fear it could penalize smaller businesses.
In the U.S., U.S. energy companies this week added oil and natural gas drilling platforms for the ninth week in a row, according to Baker Hughes’ census, as mostly small producers are responding to high prices and government encouragement to increase production.
The rig number is an indicator of future production growth.
Americans continued to get behind the wheel, even though gasoline prices at the pump continue to hit record highs. The AAA car club said regular unleaded gasoline hit a record $ 4.59 per gallon. gallon this Friday.
In India, crude oil imports were the highest in 3-1 / 2 years in April, as the world’s third largest oil importer and consumer increased its reduced Russian oil purchases to boost demand and combat high prices.
In Norway, crude oil production in April missed the official forecast by 10.6%, while gas production was in line with expectations.