NEW YORK (Reuters) – Oil prices rose sharply on Friday amid concerns that a planned European Union embargo on Russian oil and easing of the COVID-19 lockdown in China could hurt slowing economic growth and demand.
Brent futures for July delivery rose 51 cents, or 0.5%, to 2 112.55 a barrel. US West Texas Intermediate (WTI) crude for June delivery rose $ 1.02, or 0.9%, to $ 113.23.
WTI gained its fourth consecutive week, which it did in mid-February. Brent gained about 1% this week after falling about 1% last week.
The more actively-traded WTI contract for July rose about 0.4% to 110.28 a barrel.
“Risks are leaning in the opposite direction … in the wake of China’s resumption and continued efforts by the European Union to impose a Russian oil embargo,” said Craig Erlam, a senior market analyst at ONDA.
In China, Shanghai indicated no change in the planned completion of the June 1 long city-wide lockdown, although the city announced the first new COVID-19 case outside the quarantine area in five days.
The energy market expects that lifting some coronavirus restrictions in Shanghai will increase energy demand. China is the world’s top crude importer.
The EU is hoping to reach an agreement on Russia’s proposed ban on crude imports, which would include engraving-outs for member states that are most dependent on Russian oil, such as Hungary.
“Following Germany’s success in halving Russian oil imports in a very short period of time, an EU embargo is likely to be announced soon,” the consultancy BCA said in a note.
Germany’s big business is drafting a plan to use an auction system if Russia shuts off its gas, which will help supply rations, although some fear it could penalize smaller companies.
In the U.S., U.S. energy firms added oil and natural gas rigs in a row for the ninth week this week, according to Baker Hughes rig calculations, with most small producers responding to higher prices and persuading the government to increase output.
The rig calculation is an indicator of future output growth.
Despite the record price of gasoline at the pump, Americans continue to go behind the wheel. Auto Club AAA said Friday that the national average regular unleaded gasoline price hit $ 4.59 per gallon.
In India, crude oil imports peaked in 3-1 / 2 years in April as the world’s third-largest oil importers and consumers increased purchases of discounted Russian oil to recover fuel demand and fight high prices.
In Norway, crude output missed the official forecast by 10.6% in April, when its gas production was in line with expectations. (Additional report by Noah Browning in London and Sonali Paul in Melbourne; edited by Margurita Choy, Susan Fenton and David Gregorio)