LONDON, April 29 : Oil prices rose for a fourth day on Friday as fears over Russian supply disruption outweighed the impact of COVID-19 lockdowns in China, the world’s biggest crude importer, Reuters is reporting.
Brent crude futures rose by $2.21, or 2.1 percent, to $109.80 a barrel by 1358 GMT after gaining 2.1 percent in the previous session. The front-month June contract expires later on Friday. The more active July contract rose by $1.95 to $109.21.
US West Texas Intermediate crude gained $1.44, or 1.4 percent, to $106.80 after advancing by 3.3 percent on Thursday.
Both contracts are set to finish up on the week and post their fifth straight month of gains, buoyed by the increased likelihood that Germany will join other European Union member states in an embargo on Russian oil.
“Despite the impact that Chinese lockdowns are having, the risks remain tilted to the upside, especially if the EU manages to deliver on an immediate embargo,” said Craig Erlam, senior market analyst at OANDA.
Oil prices have remained volatile with China showing no signs of easing lockdown measures despite the impact on its economy and global supply chains.
“With both full and partial lockdowns ramping up since March, China’s economic indicators have plunged further into the red. We now expect China’s GDP to slow further in Q2,” Wood Mackenzie’s head of APAC economics, Yanting Zhou, said in a note.
On the supply side, OPEC+ is likely to stick to its existing deal and agree another small output increase for June when it meets on May 5, six sources from the producer group told Reuters on Thursday.
However, Russian oil production could fall by as much as 17 percent this year, an economy ministry document seen by Reuters showed on Wednesday, as Western sanctions over Russia’s invasion of Ukraine hurt investments and exports.
Sanctions have also made it increasingly difficult for Russian ships to send oil to customers, prompting Exxon Mobil Corp. to declare force majeure for its Sakhalin-1 operations and curtail output.
But the rally could stall and prices average at just below $100 a barrel this year, a Reuters poll found on Friday, as economic risks and China’s COVID lockdowns counter supply shortfalls due to the Ukraine war.
—Reuters
