Daily Times

Oil prices fell on Friday after top crude importer China widened its COVID-19 curbs, though benchmarks were poised for a weekly gain on supply concerns and surprisingly positive economic data.

Brent crude futures dropped 87 cents, or 0.9%, to $96.09 a barrel by 1309 GMT, having climbed by 1.3% in the previous session. U.S. West Texas Intermediate (WTI) crude futures were down $1.02, or 1.2%, at $88.06.

Both benchmarks, however, were on course for a weekly rise of about 3%.

Friday’s declines came after Chinese cities ramped up COVID-19 curbs on Thursday, sealing up buildings and locking down districts in a scramble to halt widening outbreaks.

China registered 1,506 new COVID-19 infections on Oct. 27, the National Health Commission said on Friday, up from 1,264 new cases a day earlier.

The International Monetary Fund expects China’s growth to slow to 3.2% this year, a downgrade of 1.2 points from its April projection, after an 8.1% rise in 2021.

“It’s hard to make a case for a rebound in China’s crude purchases given the backdrop of uncertainty over its zero-COVID policy,” said PVM Oil analyst Stephen Brennock.

Limiting losses, however, was a strong rebound in U.S. gross domestic product (GDP) in the third quarter, highlighting the resilience of the world’s largest economy and oil consumer.

U.S. GDP increased at a higher than expected 2.6% annualised rate, Thursday’s data showed, after a 0.6% contraction in the previous quarter.

The German economy also grew unexpectedly in the third quarter, data showed on Friday, as Europe’s largest economy kept recession at bay for now despite high inflation and concerns over energy supply.

Supply concerns ahead of a looming European ban on Russian crude imports also supported prices.

“The market remains wary of the impending deadlines for European purchases of Russian crude before the sanctions kick in on 5 December,” ANZ Research analysts said in a note.