Friday’s drops came after Chinese cities doubled on COVID-19 brakes on Thursday.
Oil costs fell on Friday after China, the top crude importer, extended its COVID-19 restrictions, though benchmarks are set for a weekly gain due to origin issues and strangely positive economic data.
Brent futures fell 50 cents, or 0. 5 percent, to $96. 46 a barrel at 10:47 GMT, after 1. 3 percent in the previous session. West Texas Intermediate (WTI) crude futures fell 78 cents, or 0. 9 percent, to $88. 30.
Both benchmarks, however, were on track for a weekly settlement with Brent heading for around 3% and WTI around 4%.
Friday’s drops came after Chinese cities tightened COVID-19 restrictions on Thursday, sealing off buildings and locking neighborhoods in a stampede to prevent the spread of outbreaks.
China recorded 1,506 new COVID-19 infections on Oct. 27, the National Health Commission said Friday, up from 1,264 new the day before.
The International Monetary Fund expects China’s expansion to slow to 3. 2 percent this year, 1. 2 points below its April projection, after emerging 8. 1 percent in 2021.
“It’s to argue for a rebound in China’s crude oil purchases given the uncertainty surrounding its zero-COVID policy,” said Stephen Brennock, an analyst at PVM Oil.
However, a rebound in U. S. gross domestic product (GDP) will be a major contributor. The U. S. economy in the third quarter capped losses, underscoring the resilience of the world’s oil-intensive economy.
U. S. GDP The U. S. economy grew at a higher-than-expected annualized rate of 2. 6%, according to Thursday’s data, following a 0. 6% contraction in the latest quarter.
Germany’s economy also saw an unforeseen expansion in the third quarter, data showed on Friday, as Europe’s largest economy kept recession at bay for now despite high inflation and considerations over energy supply.
Concerns about the future of an imminent EU ban on imports of Russian crude also supported prices.
“The market remains wary of approaching European purchases of Russian crude ahead of sanctions that will take effect on Dec. 5,” analysts at ANZ Research said in a note. Melbourne edition by David Goodman)
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