Oil rises on supply support, but is heading for a weekly decline

Oil prices rose on Friday, boosted by investor interest in Russia’s threat to halt oil and gas exports to some buyers, but crude is set for a second weekly decline as demand is affected by large interest rate increases by central banks and the impact of coronavirus-related restrictions in China.

Brent crude futures rose 22 cents, or 0.3 percent, to $89.37 a barrel by 0635 GMT. While US West Texas Intermediate crude futures rose ten cents, or 0.1 percent, to $ 83.64.

The two benchmark oil benchmarks are heading for a weekly decline of 4 percent, with the market dropping at some point this week to its lowest level since January.

This drop has been hampered by clear supply shortages amid Russia’s threat to cut oil flows to any country that supports a cap on its crude price, a small production cut by OPEC and its allies, and a weaker outlook for oil production growth in the United States.

The US Energy Information Administration said on Thursday that it expects US crude production to rise by 540,000 barrels per day to 11.79 million barrels per day in 2022, down from previous expectations of an increase in production by 610,000 barrels per day.

Analysts said that in light of supply expectations, the selling, which reduced the 50-day moving average to below the 200-day moving average in the middle of the week, may be exaggerated, as demand in China, the world’s largest oil importer, could increase recover quickly.