Oil falls as demand fears exacerbate due to a new partial closure in Shanghai

Oil prices fell on Friday but remained close to three-month highs, as concerns about new anti-Covid-19 closures in Shanghai outweighed the impact of strong fuel demand in the United States, the world’s largest consumer.

Brent crude futures for August delivery fell 77 cents, or 0.6 percent, to $122.30 a barrel by 0448 GMT, after falling 0.4 percent the previous day. US West Texas Intermediate crude for July fell 72 cents, or 0.6 percent, to $120.79 a barrel, after dropping 0.5 percent on Thursday.

However, Brent crude is heading to record gains for the fourth consecutive week, while US crude is heading towards recording the seventh consecutive weekly increase.

Shanghai and Beijing returned to COVID-19 alert on Thursday after parts of Shanghai, China’s largest economic hub, imposed new lockdown restrictions and the city announced a round of mass testing of millions of residents.

China’s imports of crude oil rose about 12 percent in May, but refineries are still grappling with rising inventories amid shutdowns and a slowing economy that affected fuel demand last month.

Meanwhile, peak summer fuel demand in the US continues to support crude prices.

“The summer driving season in the US sees record hikes in gasoline and diesel consumption, but similar increases in fuel prices, along with lower inventories, indicate a market at risk of supply disruptions and fears of a sharp drop in demand once the peak season fades,” analysts at Fitch Solutions said in a note. the demand”.

The United States and other countries have entered into a series of withdrawals from strategic reserves, but their impact has been limited, with global crude supplies increasing very slowly.