Oil Mixed as China Lockdowns Add Pressure on Fuel Demand Prospects

On Friday, oil prices turned mixed over the COVID-19 lockdowns in China which have been dimming the prospects for crude oil demand, even as the Ukraine-Russia crisis and the resulting Western sanctions on the Kremlin boosted fuel prices.

As per Reuters, Brent crude futures gained by 15 cents to $107.74 per barrel by 0410 GMT, after rising by 2.1% in the previous session. The U.S. West Texas Intermediate (WTI) crude slid by 3 cents to $105.33 a barrel, after adding 3.3% on Thursday. However, both the contracts are set to end the week on a positive note with the WTI due to record five successive months of highs, spurred by the mounting possibility of Germany joining other EU nations in imposing a ban on Russian oil.

Yanting Zhou, Head of APAC Economics at Wood Mackenzie, contended, "With both full and partial lockdowns ramping up since March, China's economic indicators have plunged further into the red. We now expect China's GDP to slow further in Q2." She added, "Oil market volatility is set to continue, with the potential for more widespread and prolonged lockdowns into May and beyond, skewing the near-term risks for China's oil demand — and prices — to the downside."

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