Oil prices fall as hopes of increasing Chinese demand fade

Oil prices fell on Friday for a second week as investor concerns about the impact of sharp increases in interest rates on energy consumption dashed hopes related to rising Chinese demand and production cuts by the Organization of the Petroleum Exporting Countries and its allies.

Patrick Harker, Federal Reserve Chairman of Philadelphia, said that in order to combat inflation, the bank is trying to slow the economy and will continue to raise interest rates in the short term.

Brent crude fell $1.16, or 1.3 percent, to $91.22 a barrel by 0821 GMT. US West Texas Intermediate crude fell 74 cents, or 0.9 percent, to $83.77 a barrel.

Brent crude is on track to record a weekly increase of 0.4 percent, while WTI is expected to decline by 2 percent. Thus, the two crudes fell for the second week in a row.

A Bloomberg report on Thursday, citing informed sources, said that China is considering reducing the quarantine period for visitors to seven from ten days. There was no official confirmation of the order from Beijing.

China, the world’s largest crude importer, has adhered to strict anti-Covid-19 rules this year, which has severely affected businesses and economic activity and reduced demand for fuel.

Oil prices got support from an imminent European Union ban on Russian oil, as well as from OPEC +, which includes OPEC and allies including Russia, agreed earlier this month to cut production.