Oil prices edge lower in early trading

[NEW YORK] Oil prices slipped in early Asian trading, following the second straight weekly decline after world consumers announced plans to release crude from strategic stocks and as Chinese lockdowns continued.

As of 10.02 pm GMT, Brent crude fell 38 US cents to US$102.40 a barrel while US crude lost US$0.16 to US$98.18. Last week, Brent dropped 1.5 per cent while US West Texas Intermediate slid 1 per cent. For several weeks, the benchmarks have been at their most volatile since June 2020.

The market has been watching developments in China, where authorities have kept Shanghai, a city of 26 million people, locked down under its "zero tolerance" for Covid-19. China is the world's biggest oil importer.

Member nations of the International Energy Agency (IEA) will release 60 million barrels over the next 6 months, with the United States matching that amount as part of its 180 million barrel release announced in March.

The release could also deter producers, including the Organization of the Petroleum Exporting Countries (Opec) and US shale producers, from accelerating output increases even with prices around US$100 a barrel, ANZ Research analysts said in a note.

However, the Opec+ group of oil exporting nations has not shown any inclination to increase its output targets more than the 400,000 barrels per day it has been adding monthly as part of a restoration of supply cuts.

The IEA release would amount to roughly 2 million barrels of daily supply for the next 2 months - plus another 1 million bpd from the United States for 4 months after that. It is unclear whether that will offset the shortfall in Russian crude after that nation was hit with heavy sanctions following its invasion of Ukraine.

Russia's production of oil and gas condensate fell to 10.52 million barrels per day (bpd) for Apr 1-6 from a March average of 11.01 million bpd. REUTERS