Oil futures ended higher Friday, but logged a second, consecutive weekly decline as several countries joined the U.S. in releasing crude reserves.
West Texas Intermediate crude for May delivery
rose $2.23, or 2.3%, to close at $98.26 a barrel on the New York Mercantile Exchange, leaving the U.S. benchmark with a weekly fall of 1%.
Crude has seen volatile trade since Russia’s late-February invasion of Ukraine, with the U.S. benchmark briefly trading at a roughly 14-year high above $130 a barrel in early March, while Brent came within a whisker of $140. WTI had closed at $92.10 a barrel on the eve of the invasion on Feb. 23, while Brent had traded at $94.05.
The Biden administration last week announced it would release 180 million barrels of crude — at a pace of 1 million barrels a day for six months — from the U.S. Strategic Petroleum Reserve. The International Energy Agency this week said its member nations would join in, releasing another 60 million barrels that would be matched by the U.S. as part of its 180 million barrel release.
The “massive” release of oil from emergency reserves was expected to noticeably ease the supply situation, said Carsten Fritsch, analyst at Commerzbank.
Meanwhile, the lockdown of Shanghai by Chinese authorities in response to COVID-19 cases has been extended, adding to price weakness, Fritsch wrote.
“This means that the business metropolis with its 25 million inhabitants, which accounts for around 4% of Chinese oil demand, is condemned to remain at a standstill,” he said.
Oil maintained gains after oil-field services company Baker Hughes said the number of U.S. oil rigs were up 13 from last week to 546. Compared to a year earlier, the number of oil rigs was up by 209.
Meanwhile, natural-gas production “remains in a disappointing range based on the daily data we look at, coal prices are high and stocks are low, tightening the coal-to-gas displacement band,” said Christopher Louney, analyst at RBC Capital Markets, in a note. “Nuclear outages are high and cold weather has gyrated in certain regions, all while the global gas picture remains tense and Russia’s war in Ukraine continues.”