Oil prices extend losses amid growth concerns and the Shanghai lockdown
Oil prices extended their losses on Friday as interest rate hikes, weak global growth, and the COVID-19 lockdowns in China stifled demand as the European Union ponders its ban on Russian oil.
Brent crude futures fell $1.30, or 1.2%, to $107.03 a barrel at 0603 GMT, while West Texas Intermediate (WTI) crude futures fell $1.27, or 1.2%, to $102.52 a barrel.
Both benchmark contracts headed for a weekly decline of around 4.2%.
This week has been the least volatile trade week since Russia launched its invasion of Ukraine on February 24.
The International Monetary Fund's (IMF) downgrade its global growth forecast for the Ukraine crisis, global inflation, and low economic growth dominated the trade in the second half of the week.
China's central bank governor Yi Gang said on Friday that the world's second-largest economy is not immune to external shocks, and also that COVID outbreaks are putting pressure.
Falcon statements made by the USA on Thursday pointed to aggressive interest rate hikes, and the US Federal Reserve (Fed) Chairman Jerome Powell pointed to rapid tightening in monetary policy, saying that a 50-basis point rate hike may be required from the beginning of May. The US dollar rose, oil became more expensive for buyers of other currencies, and the negative sentiment for oil increased.
In the narrow market, which is likely to face a further supply squeeze if the European Union bans Russian oil, growth concerns in China and fears that the tightening of the Fed may push the US to slow down are putting pressure on oil prices.
The ongoing sanctions against Russia and the supply gap caused by the war will inevitably help keep oil prices strong in the long run.
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