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    Oil falls as US inflation data surges, China imposes lockdowns

    Oil falls as US inflation data surges, China imposes lockdowns

    Oil falls as US inflation data surges, China imposes lockdowns
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    By Reuters  IST (Published)

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    Brent crude fell $1.06 to settle at $122.01 a barrel and US West Texas Intermediate crude fell 84 cents to settle at $120.67 a barrel.

    Oil prices fell on Friday, after US consumer prices rose more than expected and China imposed new COVID-19 lockdown measures.
    Brent crude fell $1.06 to settle at $122.01 a barrel and US West Texas Intermediate crude fell 84 cents to settle at $120.67 a barrel.
    Both benchmarks still posted weekly gains, 1.9% for Brent and 1.5% for WTI.
    For the day, oil prices sank along with Wall Street stocks after news that US consumer prices accelerated in May. Petrol prices have hit a record high and the cost of food has soared, leading to the largest annual increase in about 40 years. That raises expectations that the Federal Reserve will tighten policy more aggressively.
    "The concern is that could be a forward indicator of consumer habits and even though fuel demand is strong now, it's a sign in the future that if petrol prices don't stabilise then consumers will be cutting back," said Phil Flynn, analyst at Price Futures.
    In another red flag for demand, Shanghai and Beijing went back on COVID alert on Thursday. Parts of Shanghai imposed new lockdown restrictions and the city announced a round of mass testing for millions of residents.
    China's crude oil imports in May were up nearly 12% from a year earlier, when they were low.
    "This does not indicate that oil demand is picking up. Instead, China is likely to have acted opportunistically, buying crude oil from Russia at a significantly lower price than the global market level in order to replenish its stocks," Commerzbank analyst Carsten Fritsch said.
    Oil prices went up more than $1 earlier in the session from fears of a potential disruption in supplies in Europe and Africa.
    Norway's oil output could be reduced if workers go on strike on Sunday, the Norwegian Oil and Gas Association (NOG) said.
    Some 845 of roughly 7,500 employees on offshore platforms plan to strike from June 12 if annual pay negotiations fail.
    Oil output at Libya's Sarir field has been reduced after the ports of Ras Lanuf and Es Sider were closed and as a group threatened to close Hariga port, two oil engineers at the field said.
    In US supply, the US oil rig count, an indication of future supply, rose six to 580 this week, their highest since March 2020.
    Prospects are receding for reaching a nuclear deal with Iran and lifting US sanctions on the Iranian energy sector.
    Iran on Thursday dealt a near-fatal blow to chances of reviving the nuclear deal as it began removing essentially all the International Atomic Energy Agency monitoring equipment installed under the deal, IAEA chief Rafael Grossi said.
    Money managers cut their net long US crude futures and options positions by 1,674 contracts to 284,171 in the week to June 7, the US Commodity Futures Trading Commission (CFTC) said on Friday.
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