Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Crude Oil Higher, But Reserves Plan Leads to Weekly Loss

Commodities Apr 08, 2022 09:12AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters.

By Peter Nurse   

Investing.com -- Oil prices climbed higher Friday, but remained on course for more weekly losses following plans for massive crude releases from the strategic reserves of consuming nations as well Covid lockdowns in top importer China.

By 8:15 AM ET (1215 GMT), U.S. crude futures traded 0.4% higher at $96.42 a barrel, while the Brent contract rose 0.2% to $100.75.

U.S. Gasoline RBOB Futures were up 0.4% at $3.0520 a gallon.

Both crude benchmarks may be in positive territory Friday, but they remain on course for a second consecutive lower week, with Brent currently seen dropping 3.3% and Nymex falling 2.5%.

Weighing heavily on the overall market was the news earlier this week that International Energy Agency member countries had agreed to release 60 million barrels of crude from their emergency reserves in an attempt to drive down prices.

This means that, following a similar announcement from the Biden administration last week, that the U.S. and allies have announced plans to sell almost a quarter-of-a-billion barrels from strategic petroleum reserves, a significant amount.

Adding to the negative sentiment is the extended lockdown in Shanghai, China’s financial hub, with Covid cases topping 21,000 on Thursday. 

The original eight-day lockdown of Shanghai was supposed to end earlier this week but shows no immediate signs of ending, and traffic congestion levels at peak hours are 40% lower than a year ago, according to data from Baidu.

“How prolonged and widespread Chinese lockdowns become could be a key factor in the short-term, with it being such a large consumer and some cities with very few cases already imposing harsh restrictions,” said Craig Erlam, an analyst at OANDA. “The zero-Covid approach in Beijing could weigh heavily on economic activity.”

That said, prices remain around the $100 a barrel level amid doubts that the hefty addition of crude from the reserves can make up for the lack of Russian oil, given Moscow was the second largest exporter in the world.

The European Union confirmed its latest sanctions package on Thursday, banning imports of Russian coal and Japan followed suit. However, as reports of atrocities committed by Russian troops in Ukraine continue to mount, the latest being a missile attack on a train station, the pressure on European governments, especially Germany, to apply the same treatment to Russian oil will increase.

"In the court of public opinion, pressure is mounting on Brussels to act, and if that pressure valve pops and the EU sanctions Russian oil, we could see Brent crude at $120 in a heartbeat," said Stephen Innes, managing director of SPI Asset Management, in a note.

Crude Oil Higher, But Reserves Plan Leads to Weekly Loss
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email