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Crude Oil Higher; First Losing Week in Three Looms -Breaking

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© Reuters

Peter Nurse   

Investing.com – Oil prices increased Friday but still face their first weekly decline in three weeks. This is due to concern that subdued economic growth will impact global demand.

At 9:10 am ET (1330 GMT), the futures had traded 2.7% higher to $108.92/barrel, and contract prices rose 2.4% at $110.05/barrel by 0910 GMT. Brent fell around 3%, and WTI fell just under 2%.

The U.S. was up 2.5% to $3.8864 per gallon.

Oil prices are up more than 40% this year as supply concerns in the wake of Russia’s invasion of Ukraine combined with economies rebounding from the pandemic. But, recent confidence issues, including weaker global growth and inflation as well as China’s COVID curbs, have weighed on the market.

According to its Monthly Report for May released Thursday, The World Oil Consumption Forecast for this Year was Reduced by the Institute for Supply Management.

According to the group of leading producers, global demand is expected to rise by an average of just 3.4 million barrels per day in 2015, compared with a previous estimate of 3.7million b/d. 

They were more pessimistic and predicted in their monthly report released on Thursday that demand would rise by approximately 1.8 million barrels per day this year. This is significantly less than what they had expected to see at 3.3 million b/d when we entered this year. 

”Unsurprisingly, expectations for lower demand have been driven by the Covid related lockdowns in China, higher prices and more modest economic growth,” analysts at ING said, in a note.

Earlier Friday Beijing authorities were forced to deny speculation that the Chinese capital will go into lockdown as COVID cases increased, as restrictions in the country’s financial hub, Shanghai, drag on.

Other news: Foreign ministers of the G7 industrial nation group agreed to give more weapons and aid to Kyiv on Friday, increasing pressure on Russia not to invade Ukraine.

There are doubts that the European Union can agree to prohibit the import of Russian oil or gas under a wider sanctions package. Hungary is opposed to the plan. This requires unanimous consent. 

This week’s highlights include the number of U.S.-operated oil rigs and their scheduled release in the latter part of the session.

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