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The International Monetary Fund this week cut its global
economic growth forecast while the U.S. Federal Reserve Chair on
Thursday said that a half-point increase to interest rates "will
be on the table" at the next Fed policy meeting in May.
Brent crude was down $1.73, or 1.6%, at $106.60 a barrel by 1045
GMT. U.S. West Texas Intermediate (WTI) crude declined $1.89, or
1.8%, to $101.09.
"At this stage, fears over China's growth and overtightening by
the Fed, capping U.S. growth, seem to be balancing out concerns
that Europe will soon widen sanctions on Russian energy
imports," said Jeffrey Halley, analyst at brokerage OANDA.
The outlook for demand in China, the world's biggest oil
importer, continues to weigh. Shanghai announced a new round of
measures including daily coronavirus testing from Friday, adding
to strict measures to curb the latest outbreaks.
Brent hit $139 a barrel last month, its highest since 2008, but
both oil benchmarks were heading for weekly declines of more
than 4%.
Ongoing support is provided by supply tightness after
disruptions in Libya, which is losing 550,000 barrels per day
(bpd) of output, and supply could be squeezed further if the
European Union imposes an embargo on Russian oil.
An EU source told Reuters this week the European Commission is
working to speed up availability of alternative energy supplies
to try to cut the cost of banning Russian oil and persuade
reluctant nations to accept the measure.
"An EU boycott of Russian energy would inevitably lead to higher
energy prices, at least in the immediate term," said Stephen
Brennock of oil broker PVM. "It looks to be a case of if, not
when."
(Additional reporting by Sonali Paul in Melbourne and Isabel Kua
in SingaporeEditing by David Goodman)
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