Oil pared an earlier gain, bookending another tumultuous week of trading, as investors weighed the prospect of a European Union ban on Russian crude imports and uncertainty over China’s virus resurgence.
West Texas Intermediate futures were up 0.9 per cent, after earlier rising 1.9 per cent. Some EU nations said the bloc may have to consider delaying a proposed oil embargo if it can’t get Hungary to agree to it. Meanwhile, Beijing authorities denied rumours that the city will go into lockdown even as new Covid-19 cases climbed.
Friday also saw a glimpse of hope in efforts to revive the Iran nuclear deal, with EU envoy Enrique Mora’s visit to Tehran going better than expected, according to the bloc’s foreign policy chief. Expectations had been fading that talks would resume.
Oil has swung sharply within a band of about $12 this week. Although China’s virus outbreak and Russia’s war in Ukraine have contributed to choppy trading since late February, in recent days the specter of higher interest rates and rampant inflation have also weighed on risk sentiment.
“The rollercoaster ride shows no signs of stopping,” said Stephen Brennock, an analyst at PVM Oil Associates. “At the forefront of the oil market – and the broader risk-asset complex for that matter – are growing fears of an inflation-driven global recession.”
- WTI for June delivery rose 0.9 per cent to $107.10 a barrel on the New York Mercantile Exchange at 10:16 a.m. London time.
- Futures are down 2.4 per cent this week.
- Brent for July settlement gained 1.1 per cent to $108.62 a barrel on the ICE Futures Europe exchange.
- Brent’s prompt timespread was $1.53 in backwardation, compared with $1.34 at the start of the week.
Investors are also assessing the impact of shrinking American fuel stockpiles ahead of the summer driving season. Gasoline futures in the U.S. are trading $55 a barrel above crude, the highest level in years, while retail prices climbed to a fresh record on Friday, AAA data showed.
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