Jun 10, 2022 03:20AM ET
By: AnalysisWatch
Oil prices edged lower on Friday but remained within touching distance of three-month highs as concerns over new COVID-19 blocking measures in Shanghai outweighed strong demand for fuels in the United States, the world's biggest consumer.
August Brent crude futures were 33 cents, or 0.3%, lower at $122.74 a barrel at 0647 GMT after earlier falling as low as $121.60, or 0.4%, the previous day.
U.S. West Texas Intermediate crude for July was down 29 cents, or 0.2 percent, at $121.22 a barrel after falling 0.5 percent on Thursday.
As prices have generally risen over the past two months, Brent crude was on track for a fourth straight weekly gain and WTI was on the verge of a seventh straight rise. Both benchmarks reached their highest closing prices on Wednesday since March 8, when they hit 14-year highs.
However, any losses are likely to be limited as physical shortages of crude oil and refined products remain a strong supporting factor globally.
A COVID emergency was again declared in Shanghai and Beijing on Thursday. New shutdowns were imposed in parts of Shanghai and the city announced a series of mass tests for millions of residents.
If the city continues to implement restrictions to limit the spread, economic activity could be affected.
China's oil imports were almost 12% higher in May than a year ago, when they were low. However, refiners were still struggling with high inventories, with the closure of COVID-19 and a slowing economy weighing on fuel demand last month.
Meanwhile, high summer fuel demand in the United States continues to push oil prices higher.
The United States and other countries have made several releases of strategic reserves, but these have had only a limited impact as global oil supply has increased very slowly.
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