Oil advanced at the start of the week as the Chinese city of Chengdu ended a two-week lockdown, boosting the outlook for demand.
West Texas Intermediate rose toward $86 a barrel in early Asian trading after posting a third weekly loss on Friday. Chengdu is the biggest city to have shut since Shanghai’s bruising two-month lockdown earlier this year. The capital of Sichuan province will resume normal life from Monday.
Investors are also preparing for an interest rate hike from the Federal Reserve later this week as the US central bank seeks to tame rampant inflation. Crude is on track for its first quarterly decline in more than two years after reversing all of the gains seen in the wake of Russia’s invasion of Ukraine in February.
Demand concerns continue to linger as high energy prices threaten to pull Europe into a painful recession, with governments in the region taking steps to shore up energy supplies. Germany on Friday seized the local unit of Russian oil major Rosneft PJSC as Berlin moves to take sweeping control of its energy industry and sever decades of deep dependence on Moscow for fuel.