By David Ho
Investing.com – Oil was up on Friday morning in Asia, resuming its climb after a small fall from fears about China’s lockdowns affecting growth and demand prospects.
Brent oil futures rose 1.38% to $108.93 by 10:20 PM ET (2:20 AM GMT) and crude oil WTI futures jumped 1.23% to $107.44.
However, both benchmark contracts are on track to post declines for the week. Brent is expected to drop more than 3% and WTI more than 2%.
The market has been in a tug of war between the prospect of a European Union ban on Russian oil shortening supply and demand concerns from weaker global growth, inflation and China's COVID curbs.
"The demand concern factors have grown quite a bit," said Commonwealth Bank commodities analyst Vivek Dhar.
Inflation and aggressive rate rises have driven the U.S. dollar to 20-year highs, which has capped oil price gains. A strong dollar makes oil more expensive for buyers holding other currencies.
But analysts continue to focus on the prospect of a European Union ban on Russian oil. This week, Moscow had imposed sanctions on European units of state-owned Gazprom (MCX:GAZP) and Ukraine stopped a gas transit route.
"Oil is finding support from supply concerns as Russia takes another step forward to weaponize energy," said SPI Asset Management managing partner Stephen Innes.
A report by the International Energy Agency on Thursday highlighted the dueling factors in the market. It stated that rising oil production in the Middle East and the United States and a slowdown in demand growth are "expected to fend off an acute supply deficit amid a worsening Russian supply disruption".
The agency saw output from Russia falling by nearly 3 million barrels per day (bpd) from July, or about three times more than is currently displaced. Sanctions for its invasion on Ukraine are expanded or if further buying is deterred could affect the situation.