Oil prices rose 2% on Friday but posted their second straight weekly decline after countries announced plans to release crude from strategic stockpiles.
Brent crude futures settled down $2.20, or 2.19%, at $102.78 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose $2.23 to $98.26.
For the week, Brent fell 1.5% while WTI slipped 1%. For several weeks now, benchmarks have been at their most volatile since June 2020.
Trading was choppy all day and contracts rose just before settlement as traders covered short positions ahead of the weekend, said John Kilduff, partner at Again Capital LLC.
“There’s a concern that by artificially lowering prices, you’re just increasing demand and that’s depleting that supply quite quickly,” said Price Futures Group analyst Phil Flynn.
The release could also deter producers, including the Organization of the Petroleum Exporting Countries (OPEC) and U.S. shale producers, from accelerating production increases even with oil prices around $100 a barrel, it said. said analysts at ANZ Research in a note.
The OPEC+ group of oil-exporting countries’ commitment to production targets has helped absorb excess supply in the market, the Iraqi state news agency said on Friday, citing the Oil Ministry.
PVM analyst Stephen Brennock said doubts remained over whether supply from emergency reserve releases would solve the shortage of Russian crude.
JPMorgan expects the release of reserves will “do a lot in the short term” to offset the million barrels per day of Russian oil supply it expects to remain permanently offline.
“However, looking ahead to 2023 and beyond, global producers will likely need to increase investment to both fill the supply gap the size of Russia and replenish IEA strategic reserves,” he said. the bank said in a note.
U.S. producers added 13 oil rigs in the week to April 8, according to data from oil services firm Baker Hughes, a third straight week of gains.
While Russia has found Asian buyers, Western buyers have shunned shipments since the start of the conflict in Ukraine.
The Kremlin said on Friday that Russia’s “special operation” in Ukraine could end in “the foreseeable future”.
Russian production of oil and gas condensates fell to 10.52 million barrels per day (bpd) from April 1-6, from an average of 11.01 million bpd in March, two sources told Reuters on Thursday. close to the data.
The US Congress voted to ban Russian oil on Thursday, while the European Union is considering a ban.
Germany may be able to end Russian oil imports this year, Chancellor Olaf Scholz has said.
European Union countries on Thursday approved a ban on Russian coal imports, adding that the bloc will now discuss oil sanctions.
But demand uncertainties restrained prices on Friday after Shanghai extended its lockdown to deal with rapidly rising COVID-19 infections.
Further pressure came from the strengthening of the US dollar, after signals that the US Federal Reserve could raise the federal funds rate by another 3 percentage points by the end of the year.