Image: Reuters Berita 24 English - After U.S. consumer prices grew more than anticipated and China enforced more COVID-19 lockdown measures...
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| Image: Reuters |
Berita 24 English - After U.S. consumer prices grew more than anticipated and China enforced more COVID-19 lockdown measures, oil prices declined on Friday.
Brent crude declined $1.06 to close at $122.01 a barrel. The price per barrel of U.S. West Texas Intermediate crude declined by 84 cents, settling at $120.67.
Both benchmarks reported weekly gains, with Brent gaining 1.9% and WTI gaining 1.5%.
Following news that U.S. consumer prices rose in May, oil prices and Wall Street equities both fell for the day. Gasoline prices have reached an all-time high and food costs have skyrocketed, resulting in the greatest annual increase in about four decades. This increases the likelihood that the Federal Reserve will aggressively tighten monetary policy.
Phil Flynn, an analyst at Price Futures, stated, "The fear is that this could be a forward signal of consumer behaviour, and even if gasoline demand is strong today, it is a sign that if gasoline prices do not stabilise, customers would cut back."
Shanghai and Beijing re-entered COVID alert status on Thursday, signalling a new demand red flag. The city of Shanghai imposed tighter lockdown restrictions and launched a round of mass testing for millions of its inhabitants.
In May, China's crude oil imports increased by over 12 percent compared to a year before, when they were low.
"This does not reflect an increase in oil consumption. Instead, it is likely that China behaved opportunistically, purchasing crude oil from Russia at a price much below the world market price in order to replenish its stocks "Commerzbank analyst Carsten Fritsch said.
Oil prices increased by more than $1 early in the day due to concerns about a potential supply interruption in Europe and Africa.
The Norwegian Oil and Gas Association (NOG) stated that if workers go on strike on Sunday, Norway's oil production could be curtailed.
845 of around 7,500 offshore platform employees want to go on strike on June 12 if yearly pay negotiations fail.
After the ports of Ras Lanuf and Es Sider were closed and a group threatened to close Hariga port, oil output at Libya's Sarir field decreased, according to two oil engineers at the facility.
This week, the number of oil rigs in the United States increased by six to 580, the highest level since March 2020.
The likelihood of negotiating a nuclear agreement with Iran and removing sanctions on the Iranian energy industry is diminishing.
Iran began removing the vast majority of the International Atomic Energy Agency monitoring equipment installed as part of the nuclear deal on Thursday, IAEA chief Rafael Grossi said, dealing a near-fatal blow to the pact's prospects of survival.
The U.S. Commodity Futures Trading Commission (CFTC) reported on Friday that money managers reduced their net long positions in U.S. crude futures and options by 1,674 contracts to 284,171 during the week ending June 7.
