© Reuters.FILE PHOTO: Storage tanks are seen at Marathon Oil’s Los Angeles refinery in Carson, California, U.S., which processes domestic and imported crude oil into California Air Resources Board (CARB), gasoline, diesel fuel and other petroleum products
LONDON (Reuters) – Oil prices rose on Friday but were on track for their first weekly decline in three weeks, as worries about inflation and China’s coronavirus lockdowns slowing global growth offset concerns about dwindling supplies from Russia.
Futures were up 85 cents, or 0.8%, at $108.30 a barrel by 0900 GMT, while U.S. West Texas Intermediate (WTI) crude futures were up 64 cents, or 0.6%, at $106.77 a barrel Dollar.
However, both benchmark contracts are on track for losses this week, with Brent down nearly 4% and WTI down nearly 3%.
Markets continued to be driven and pulled by the prospect of a European Union ban on tighter Russian oil supplies and concerns about weaker global demand.
Oil traders are “looking for a silver lining at the end of China’s murky blockade tunnel,” Stephen Innes, managing partner at SPI Asset Management, said in a note.
“Nevertheless, we ended up with lower case counts, and the authorities are doubling down on their zero-COVID policy,” he added.
Inflation and higher interest rates have pushed the dollar to 20-year highs, capping gains in oil prices as a stronger dollar makes oil more expensive to buy in other currencies.
Analysts, however, continued to focus on the prospect of an EU ban on Russian oil after Moscow this week imposed sanctions on the European unit of state-owned Gazprom (MCX: ) and Ukraine halted a key gas shipping route.
“As prices in Europe surge, there will inevitably be some spillover to oil,” Jeffrey Halley, senior market analyst at OANDA, said in a note.
“Russia’s escalation in sanctions could lead to stronger oil prices,” he added.
Rising oil production in the Middle East and the U.S. and slowing demand growth “are expected to fend off severe supply shortages amid worsening supply disruptions in Russia,” an International Energy Agency report on Thursday said.