By Yasin Ebrahim
Investing.com – Oil prices settled higher Friday, but slipped to another weakly defeat after countries agreed to release millions of barrels from their emergency reserves offsetting signs of falling Russia output in early April as sanctions bite.
On the New York Mercantile Exchange for May delivery gained 2.32% cents to settle at $98.28 a barrel, while on London’s Intercontinental Exchange (NYSE:), added $1.91 cents to trade at $102.51 a barrel.
Oil prices were dealt a blow this week after member nations of the International Energy Agency agreed to release 60 million barrels over the next six months, easing fears of a supply shortage.
This sizeable release of oil from the emergency reserves — in tandem with the United States’ plan to release 180 million barrels of oil — would “likely ease the supply situation on the oil market noticeably,”Commerzbank said in a note.
The easing fears of supply disruptions, at least temporarily, offset signs of falling production in Russia as sanctions appear to be having impact on Russian crude demand.
Bloomberg reported earlier this week, citing data from the Russian Energy Ministry, that oil production in the first six days of April averaged 10.5 million barrels per day, that’s “roughly 500,000 barrels per day less than the March,” Commerzbank.
As well as plans to release of emergency reserves by member countries, fears of supply shortages have also been eased by a dip in demand following extended lockdowns in Shanghai.
Oil demand from China has dropped by an estimated 1.2 to 1.3 million barrels daily, as a result of the lockdown, Bloomberg reported, citing data from energy consultancy FGE.