Apr 22, 2022 02:21AM ET
By: AnalysisWatch
Oil prices extended losses on Friday, weighed down by the prospect of interest rate hikes, weaker global growth and COVID-19 freezes in China that are hurting demand, while the European Union is considering a ban on Russian oil.
Brent crude futures fell $1.30, or 1.2%, to $107.03 a barrel at 0603 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell $1.27, or 1.2%, to $102.52 a barrel.
Both benchmark contracts headed for a weekly decline of about 4.2%.
This was the most volatile week of trading since Russia's invasion of Ukraine on 24 February, which triggered sanctions that curtailed Russian oil supplies and prompted consumer countries to draw a record amount of oil from emergency stocks. Moscow calls its action in Ukraine a "special operation".
Concerns that the Ukraine conflict could fuel inflation and hurt economic growth dominated trading in the second half of the week as the International Monetary Fund cut its global growth forecast by almost a full percentage point.
The outlook for demand in China, the world's largest oil importer, continues to weigh on the market as authorities in Shanghai launch a new round of citywide tests and warn residents that the three-week freeze can only be lifted in batches once transmissions cease.
Adding to the negative sentiment for the oil market were aggressive comments by US Federal Reserve Chairman Jerome Powell on Thursday, hinting at aggressive interest rate hikes and pushing up the US dollar, making oil more expensive for buyers of other currencies.
But all this is happening in a tight market that could face even tighter supplies if the European Union imposes a ban on Russian oil.