Oil sheds most of its war-led profits in the second week’s decline

Oil has receded for two weeks following plans to release large stockpiles, a COVID-19 outbreak that robs China of demand, and a hawkish shift from the US Federal Reserve Board.

Brent crude oil delivered in June on Friday rose 2.19 percent to $ 102.78 a barrel, down 1.54 percent from a week ago.

West Texas Intermediate (WTI) delivered in May rose 2.32% to $ 98.26 a barrel.

Photo: Bloomberg

It fell 1.02% this week, and US benchmarks have returned most of their profits since Russia invaded Ukraine on February 24th.

Multiple factors

After the conflict began, oil recovered to its highest level since 2008, the United States and the United Kingdom banned Russia’s oil imports and pressured global buyers to avoid the country’s energy exports.

The sale will occur after the United States and its allies have announced plans to unleash a wave of oil from strategic stockpiles to mitigate rising fuel costs.

The US central bank has outlined plans to raise interest rates and curb balance sheets to curb inflation, which could curb growth.

Crude oil prices were also hampered after China ordered a series of blockades in major urban areas, including Shanghai, to eradicate the outbreak of COVID-19.

At the same time, the Fed’s plans to aggressively tighten US monetary policy to combat inflation slowed demand for risky assets and pushed up the US dollar.

The move to sell about 250 million barrels from strategic petroleum stocks has caused the collapse of the once rising time spread.

Ambitious buyers

While many Western companies are avoiding Russian oil following the invasion, there are many ambitious takers in Asia, especially China and India. Russian Sokol crude oil cargo from the Far East sold out next month.

China’s recent outbreak of the coronavirus has disrupted Asia’s largest economy and shows no signs of waning. Cities face strict limits that curb mobility and energy consumption.

Additional report by staff writer

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