Oil slumped on Friday, announces roughly 5% weekly loss due to growth concerns
Oil fell on Friday, posting a weekly loss of about 5% as weak global growth, higher interest rates, demand slumped by the COVID-19 lockdowns in China and the European Union considers a ban on Russian oil which may tighten supply.
Brent crude fell $1.68, or 1.6%, to $106.65 a barrel. West Texas Intermediate (WTI) crude fell $1.72, or 1.7%, to $102.07.
The global benchmark Brent hit $139 a barrel last month, its highest price since 2008, but both oil benchmarks are down about 5% this week on demand concerns.
IMF warns of further cuts in global growth forecasts. The International Monetary Fund said it could lower its rating further if Western countries expand sanctions against Russia over its war against Ukraine and energy prices rise further.
It is reported that the German government will reduce its growth forecast for 2022 from 3.6% to 2.2%, and China's demand for gasoline, diesel and aviation fuel is expected to decrease by 20% in April compared to the previous year. Some major cities of China, including Shanghai, are in COVID quarantine.
Federal Reserve Chair Jerome Powell on Thursday said a half-percentage-point increase inU.S. interest rates will be on the table at the next Fed policy meeting in May, that may push the dollar to more than a two-year high.
At this stage, fears about China's growth and the over-tightening of the Fed, which is restraining US growth, seem to offset concerns that Europe will likely expand sanctions on energy imports from Russia.
On the supply side, the Russia-Kazakh Caspian Pipeline Consortium (CPC) is expected to resume full performance exports from April 22 after about 30 days of cuts.
According to Baker Hughes, the number of US oil rigs rose by 1 this week to 549, the highest since April 2020.
US oil refineries are expected to have approximately 1.08 million bpd of offline capacity for the week ending April 22, increasing current refining capacity by 47,000 bpd.
Libya lost 550,000 barrels per day (bpd) of production due to the cuts fueled the tightness of supply. If the EU imposes an embargo on Russian oil, supply could tighten further.
The Netherlands said it plans to stop using Russian fossil fuels by the end of this year.
According to the data, European refineries processed 9.04 million barrels of crude in March, down 4% from the previous month and up 4.8% from the previous year.
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