Oil futures slumped in a second session on Friday on expectations that Washington could soon take action to cool prices that remain above $80 per barrel.
The US sale of 18 million barrels of crude oil from strategic reserves and the movement restrictions imposed by China to contain the COVID-19 outbreak are suppressing fuel demand. China, the world’s second-largest oil consumer, has suspended some international flights.
Brent crude futures were down 6 cents to $84.41 a barrel at 0427 GMT. West Texas Intermediate (WTI) crude was down 21 cents, or 0.3%, at $81.91 a barrel.
Brent and WTI prices are expected to climb for the fourth week in a row, supported by supply and geopolitical concerns in Libya and Kazakhstan, and US crude inventories falling to 2018 lows.
Although imports at the world’s largest oil importer are expected to pick up this year, Beijing has curtailed the refinery sector and inventories. In 2021, China also posted its first annual decline in crude oil shipments in two decades.
The U.S. Department of Energy said on Thursday it has sold 18 million barrels of strategic crude oil reserves to six companies, including Exxon Mobil and Valero Energy Corp.
Some investors are optimistic that Omicron’s impact on the global economy and oil demand will be short-lived and several banks predict oil prices will reach $100 this year as demand is expected to exceed supply.
Against the prices above $80, the White House is increasing the pressure by lobbying OPEC+ to exceed production quotas and may resort to another SPR statement.