Oil prices fell on Thursday but still fluctuated near a three-month high after some areas of Shanghai introduced new COVID-19 lockdown measures, although stronger-than-expected Chinese exports in May raised the demand forecast, Reuters reports.
August Brent crude futures fell 57 cents, or 0.5 percent, to $123.01 per barrel by 13:27 GMT, while July West Texas Intermediate crude was at $121.26 per barrel, down 85 cents, or 0.7 percent.
China's exports in May jumped 16.9% year-on-year as the easing of COVID restrictions allowed some factories to restart, marking the fastest growth since January of this year and more than doubling analysts' expectations.
But while Chinese trade data was optimistic, oil prices ultimately reversed their earlier modest gains.
«Of much greater significance is the news that a district of Shanghai was locked down today, which revives fears of yet another side of China's weakness due to its zero-COVID policy. This is capping any gains in Asia today,» said Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA.
«Nevertheless, it shows just how constrained oil supplies are, that oil did not retreat on this news today.».
On Thursday, parts of Shanghai began introducing new lockdown restrictions, and residents of the Minhang district were ordered to stay home for two days to control transmission risks.
«The export figures are impressive in the context of the lockdown of several of the country's cities this month,» Stephen Innes, managing partner at SPI Asset Management, said in a note.
Meanwhile, peak summer gasoline demand in the United States continued to provide a floor for prices.
U.S. gasoline inventories unexpectedly fell, as Energy Information Administration (EIA) data showed on Wednesday, indicating resilience in motor fuel demand during the peak summer period despite sky-high gasoline prices.
«It is hard to expect a significant decline in the coming months, as the gasoline market is likely to only tighten further as we approach driving season,» said Warren Patterson, head of commodities research at ING.