LONDON (Reuters) – Oil prices fell on Friday, affected by expectations of weak global economic growth, interest rate hikes and anti-Covid-19 restrictions in China that negatively affected demand, although the European Union is considering banning Russian oil imports.
The International Monetary Fund this week lowered its forecast for global economic growth, while Federal Reserve Chairman Jerome Powell said on Thursday that a half-point increase in the interest rate would be an option at the bank’s next meeting in May.
By 0810 GMT, Brent crude fell 76 cents, or 0.7 percent, to $107.57 a barrel. West Texas Intermediate crude was down 32 cents, or 0.3 percent, at $103.47 a barrel.
“At this point, concerns about growth in China and monetary tightening from the central bank limiting US growth seem to offset fears that Europe will soon expand sanctions on Russian energy imports,” said Jeffrey Haley, an analyst at OANDA.
The two demand expectations from China, the world’s largest oil importer, continued to pressure the market. Shanghai announced new anti-Covid-19 measures, including a daily check-up, starting Friday, to curb the latest outbreak of the disease in the country.
Brent reached $139 a barrel last month, its highest level since 2008, but the two benchmarks are set to record a weekly decline of more than three percent.
The current support for prices comes from a lack of supplies after the disruption of production in Libya and its decline by 550,000 barrels per day, and supplies could decrease further if the European Union imposed an embargo on Russian oil.
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