Oil Steadies as Traders Weigh China Demand, Threats to Supply

04/21/2022

1 minute read

2022.04.21 04:20

(Bloomberg) — Oil was little changed as traders assessed the lingering threat to demand from lockdowns in China against a series of challenges to supply.

West Texas Intermediate was near $102 a barrel in early Asian trading after alternating between daily gains and losses this week. China’s authorities are struggling to eradicate a fresh wave of Covid-19 in key cities and strict curbs have eroded mobility, including for the nation’s fleet of trucks.

With the war in Ukraine nearing the end of its second month, European Union members are edging toward cutting dependence on Russian crude. German Foreign Minister Annalena Baerbock said the country plans to stop imports by the end of the year, Reuters reported. At the same time, Russian output has fallen, and protests in Libya have crimped production, tightening the market.

Oil has rallied by more than a third this year, hitting the highest since 2008 after Russia’s invasion of its smaller neighbor sent shockwaves through the global energy market. The conflict has boosted inflation and spurred a rerouting of crude flows. The U.S. and U.K. have moved to ban Russian oil, and there’s rising pressure on the EU to follow suit. Washington and allies also announced the release of substantial holdings from strategic reserves.

U.S. commercial stockpiles dropped by around 8 million barrels last week, according to Energy Information Administration data. That was the biggest drawdown in holdings since January 2021.

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04/21/2022

1 minute read