Oil slips as China expands COVID curbs, but on track for weekly gains

Oil futures fell Friday as several Chinese cities widened COVID-19 curbs, but crude remained on track for solid weekly gains.

Price action
  • West Texas Intermediate crude for December delivery
    CL.1,
    -0.90%

    CL00,
    -0.90%

    CLZ22,
    -0.90%

    fell 51 cents, or 0.6%, to $88.57 a barrel on the New York Mercantile Exchange, on track for a 4.2% weekly gain.

  • December Brent crude
    BRNZ22,
    -0.72%
    ,
    the global benchmark, fell 33 cents, or 0.3%, to $96.63 a barrel on ICE Futures Europe. January Brent
    BRN00,
    -0.69%

    BRNF23,
    -0.69%
    ,
    the most actively traded contract, was off 33 cents, or 0.3%, at $94.71 a barrel, leaving it up 3.7% for the week.

  • Back on Nymex, November gasoline
    RBX22,
    -0.39%

    fell 0.7% to $2.991 a gallon, while November heating oil
    HOX22,
    +2.22%

    rose 0.6% to $4.362 a gallon.

  • December natural gas
    NGZ22,
    -1.79%

    fell 0.4% to $5.849 per million British thermal units.

Market drivers

Guangzhou, China’s fourth-largest city by economic output, widened restrictions to keep people in their homes as a COVID resurgence entered its fourth week, Reuters reported.

Related: Almost three years into the pandemic, Chinese city of Wuhan is again in partial lockdown to stem latest outbreak of cases

China’s zero-COVID policies have been a drag on oil prices in 2022, crimping demand from one of the world’s largest consumers.

“It is Friday, so we are trading off the weekly headline dregs, which still lend support for oil prices. Specifically, the EIA data shows record-high exports of crude and products and product inventory draws in the U.S., pointing to robust oil demand,” said Stephen Innes, managing partner at SPI Asset Management, in a note, referring to weekly U.S. inventory data released on Wednesday.

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