Oil headed for its third weekly loss in four as lockdowns in virus-hit China dragged on and the Federal Reserve signaled that monetary policy will be tightened aggressively to contain decades-high inflation.
Oil markets rallied alongside a broader market rebound while rising tensions in the Russia-Ukraine conflict caused jitters in the market about potential supply disruptions.
Oil steadied after a two-day advance as investors bet the global demand recovery will remain intact despite the latest wave of Covid-19 that’s led to tighter restrictions on movement in many countries.
Crude oil prices are likely to exceed forecasts as early 2018 progresses due to increased demand and strong adherence to production cuts, say Goldman Sachs.
Crude sunk after a government report showed U.S. inventories piled up for a second week just as Russia is said to be less than convinced that OPEC should extend its output limits in a meeting at the end of this month.
The average Brent crude oil price for 2016 is likely to be $40 per barrel and unlikely to rise above $50 ber barrel in 2017, according to the US Energy Information Administration.