Oil prices slipped in early Asian trade, falling for a second week in a row, after global consumers announced plans to release crude from strategic inventories and China continued its lockdown.
Brent was down 38 cents at $102.40 a barrel by 2202 GMT, while U.S. crude was down 16 cents at $98.18 a barrel. Brent crude fell 1.5% last week, while U.S. West Texas Intermediate fell 1%. For weeks, those benchmarks have been in their most volatile state since June 2020.
Markets have been watching developments in China, where authorities have locked Shanghai, a city of 26 million, under “zero tolerance” for COVID-19. China is the world’s largest oil importer.
Members of the International Energy Agency (IEA) are set to release 60 million barrels of oil over the next six months, and the U.S. will match that amount when it announces a 180 million barrel release in March. read more
Even with oil prices around $100 a barrel, the news could prevent producers including OPEC and U.S. shale producers from ramping up output, ANZ research analysts said in a note. .
However, OPEC+ has shown no inclination to raise its output target above 400,000 barrels per day as part of the resumption of production cuts.
The IEA posted an average supply of around 2 million bpd for the next two months, with another 1 million bpd to rise in the next four months. It is unclear whether this will offset the shortage of Russian crude after being slapped with tough sanctions following Russia’s invasion of Ukraine.
Oil and gas condensate production in Russia fell to 10.52 million bpd between April 1 and 6, from an average of 11.01 million bpd in March.