Brent crude futures were up 15 cents to $107.74 a barrel by 0410 GMT, while US West Texas Intermediate crude fell 3 cents to $105.33 a barrel.
Oil prices were mixed on Friday as China’s COVID-19 lockdown weighed on crude demand outlook, though supply disruptions were feared as Western sanctions curbed crude and exports of products from Russia. reduced prices.
Brent crude futures rose 15 cents to $107.74 a barrel, after gaining 2.1% in the previous session. The front-month June contract expires later on Friday. The more active July contract rose 26 cents to $107.52 a barrel.
US West Texas Intermediate crude fell 3 cents to $105.33 a barrel on Thursday after being up 3.3%.
With both contracts set to close at week highs, WTI is on track to post five straight months of gains, buoyed by the prospect that Germany will join other EU member states in sanctions on Russian oil .
Still, oil prices have been volatile as Beijing shows no sign of easing lockdown measures despite the impact on its economy and global supply chains.
“With both complete and partial lockdowns since March, China’s economic indicators have fallen into the red. We now expect China’s GDP to rise in the second quarter,” Yingying Zhou, Wood Mackenzie’s head of APAC Economics, said in a note. I will slow down further.”
“Oil market volatility is set to continue, with the prospect of more widespread and prolonged lockdowns in May and beyond, skewing near-term risks to China’s oil demand – and prices – on the downside. “
On the supply side, OPEC+ is likely to stick to its current deal and agree another small production increase for June, when it meets on May 5, six sources in the producer group told Reuters on Thursday.
However, Russia’s oil output could fall by up to 17% in 2022, an economy ministry document seen by Reuters showed on Wednesday, as Western sanctions imposed on Moscow over Ukraine’s invasion hurt investment and exports . Russia calls it a “special military operation” to disarm Ukraine.
The sanctions have also made it difficult for Russian ships to send oil to customers, prompting Exxon Mobil Corp to declare a force majeure event for its Sakhalin-1 operations and to cut production.
Concerns about disruptions to Russian oil exports, especially diesel, have pushed Asian refiners’ margins to record levels.
Diesel futures closed Thursday at a record high of $5.14 a gallon, while New York Harbor diesel futures traded at a record premium to prices, which traders are describing as a brief squeeze against the May diesel contract.
(Reporting by Florence Tan; Editing by Richard Pullin and Kim Coghill)
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