Oil loses gains as parts of China implement new COVID-19 lockdown measures
Oil prices gave up on early gains on Thursday as parts of Shanghai implemented new COVID-19 lockdown measures, contrary to the news of China's stronger-than-expected exports in May.
Brent crude futures for August fell 15 cents, or 0.1%, to $123.43 at 0630 GMT, while West Texas Intermediate (WTI) crude for July fell 20 cents, or 0.2%, to $121.91 per barrel.
Both indicators closed at their highest levels since March 8 on Wednesday, back to the levels seen in 2008.
China's May exports rose 16.9% year-on-year as the easing of COVID restrictions allowed some factories to reopen, providing the fastest growth since January this year and more than double what analysts had expected.
However, although the Chinese trade figures were optimistic, they could not raise oil prices for a long time.
Parts of Shanghai began imposing new quarantine restrictions on Thursday and declared a two-day curfew in the Minhang area to control the risks of COVID transmission. Export performance is impressive, given the country's lockdown in multiple cities during the month.
The quarantine of an area of Shanghai has been significant development and aroused concerns over China's zero-Covid policies. This limits the gain in Asia.
Meanwhile, the high demand for gasoline in the United States during the summer continues to underpin prices.
US commercial inventories increased last week, but strategic crude oil reserves dropped to a record, the Energy Information Administration (EIA) said on Wednesday.
US gasoline stocks fell unexpectedly, demonstrating the elasticity of demand for fuel during peak summer months despite higher pump prices.
According to analysts, no major adverse events are expected in the coming months, with the gasoline market likely to tighten further as the driving season progresses.
EIA data show that apparent demand for all petroleum products in the United States rose to 19.5 million barrels per day (bpd), while gasoline demand rose to 8.98 million barrels per day.
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