WTI Crude Oil traded above $78 per barrel on Friday and are on track to gain nearly 5% in a year marked by extreme volatility as various supply risks vied with persistent demand concerns.
The US oil benchmark reached a 14-year high of $130 per barrel in March as Russia invaded Ukraine, upending energy flows that have already been reeling from Covid-related disruptions. Oil prices then gave back most of those gains as major central banks aggressively raised interest rates to tame surging inflation, triggering fears of a global economic slowdown.
China’s adherence to its strict zero-Covid policy also weighed on the demand outlook in the world’s top crude importer through most of the year.
However, the Asian nation dismantled most restrictions in December following widespread protests a month prior, sparking hopes of a demand rebound. Investors are also watching for further actions from Russia after it banned oil exports to foreign buyers that adopt the G7 price cap.