Fears that demand will go down cause oil prices to drop, and benchmarks are down 4% for the week

Image: Reuters Berita 24 English - After a slight rise in the previous session, oil prices went down early on Friday. This means that they a...

Image: Reuters

Berita 24 English - After a slight rise in the previous session, oil prices went down early on Friday. This means that they are likely to go down for a second week in a row because people are worried that aggressive rate hikes by central banks and China's COVID-19 curbs will hurt demand.

At 00:51 GMT on Friday, Brent crude futures fell 12 cents, or 0.1%, to $89.03 per barrel, after going up 1.3% on Thursday.

The price of U.S. West Texas Intermediate (WTI) crude fell 19 cents, or 0.2%, to $83.35 a barrel after going up 2% the day before.

Both benchmarks lost about 4% over the course of the week, and at one point the market fell to its lowest level since January.

Even though the Organization of Petroleum Exporting Countries (OPEC) and its allies (called OPEC+) cut production by a small amount, oil prices went down. This happened despite Russia's threat to cut oil flows to any country that supports putting a price cap on its crude, and a less optimistic outlook for U.S. oil production growth.

Thursday, the U.S. Energy Information Administration said it expected U.S. crude output to rise by 540,000 barrels per day to 11.79 million barrels per day in 2022. This was less than the 610,000 bpd increase that had been predicted earlier.

Analysts said that the sell-off, which sent the 50-day moving average below the 200-day moving average in what is called a "death cross" in the middle of the week, may have been overdone because China, which is the biggest oil importer in the world, could quickly recover.

"China's demand is harder to predict, but when COVID reopened in the past, demand went up quickly instead of slowly. In this situation, the fundamentals seem to be at odds with the most recent technical signals "In a note, analysts from the National Australia Bank said.

For now, China is putting more limits on things. On Thursday, the city of Chengdu kept its lockdown in place for most of its more than 21 million residents. At the same time, millions of people in other parts of China were told not to travel during the upcoming holidays.