By David Ho

Investing.com – Oil was up on Friday morning in Asia, resuming its climb after a small fall from fears about China’s affecting growth and demand prospects.

By 10:20 ET (2:00 AM GMT), the price of $108.93 had risen 1.38% and then jumped by 1.23%, to $107.44.

Both benchmark contracts will see declines this week, however. Brent will drop by more than 3 percent, and WTI is likely to fall more than 22%.

There has been a tug-of war in the market between the possibility of Russia’s oil being banned by Europe and concerns over supply shortages and weaker global growth.

Vivek Dahar, Commonwealth Bank commodities analyst, stated that the demand concerns have grown significantly.

Inflation and rapid rate rises have driven down the U.S.dollar to new 20-year highs. This has held back oil prices gains. Buyers of other currencies will find oil more costly if the US dollar is strong.

Analysts continue to be focused on the possibility of an EU ban on Russian oil. Moscow has imposed sanctions against European Gazprom (MCX) units, and Ukraine suspended a gas transit route.

Stephen Innes (SPI Asset Management managing Partner) said, “Oil finds support from supply concerns and Russia takes another step forward in weaponizing energy.”

On Thursday, the International Energy Agency published a report that pointed out the competing factors driving the market. According to the report, a combination of rising oil production from the Middle East and America and slowing demand growth will “fend off an acute shortage amid worsening Russian supplies disruption”.

According to the agency, Russia’s output fell by almost 3,000,000 barrels per daily (bpd), in July. This is three times less than what is being displaced at present. The situation could be affected if sanctions against Russia are increased or further purchases are deterred.