LONDON: Oil fell by more than $3 a barrel on Friday and was on track for a second weekly decline, pressured by concern about weakening demand in China and further increases to US interest rates.

As part of the rout, the market structure of both oil benchmarks shifted in ways that reflect dwindling supply concerns. Crude had come close to record highs this year as Russia’s invasion of Ukraine added to those concerns.

China, which sources say is looking to slow crude imports from some exporters, has seen a rise in Covid-19 cases while hopes for less aggressive U.S. rate hikes have been dented by remarks from some Federal Reserve officials this week. “As things stand, bullish price drivers are in short supply,” said Stephen Brennock of oil broker PVM. “Yet with the EU embargo on Russian crude less than three weeks away, oil prices could still end the year with a bang.”

Brent crude was down $3.17, or 3.5pc, at $86.61 a barrel by 1445 GMT, having touched its lowest since Sept 28 at $85.80. US WTI crude was down $3.67, or 4.5pc, at $77.97. Both benchmarks are heading for a second weekly loss, with Brent on track for a more than 9pc decline.

Published in Dawn, November 19th, 2022