Oil prices posted an almost $7 per barrel weekly loss during the week ending April 22 over the prospect of weaker global growth, as the International Monetary Fund (IMF) on Tuesday downgraded the world economic outlook for this year and 2023.
International benchmark Brent crude traded at $106.57 per barrel at 1005 GMT on Friday, marking a $7 drop from Monday's closing of $113.16.
American benchmark West Texas Intermediate (WTI) traded at $102.06 per barrel at the same time, displaying a $6 fall from Monday's $108.21 closing.
The IMF said the effects of two months of war between Russian and Ukraine can be seen in the global economy.
'The war will slow economic growth and increase inflation,' IMF chief economist, Pierre-Olivier Gourinchas, said.
As a result, the IMF cut its global growth forecast for this year to 3.6% and expects the global economy to grow 3.6% in 2023.
Slower economic growth means lower oil demand, and, in turn, lessens supply pressure resulting in downward price movements.
Brent crude closed at $113.16 per barrel on Monday, while WTI traded at $108.21 per barrel.
Oil prices started the week higher after Easter Sunday, triggered by growing tensions between Ukraine and Russia as Ukrainian troops in the besieged strategic port city of Mariupol held out in defiance against Russia's siege of the city.
Additionally, Libya's National Oil Corporation (NOC) declared a force majeure on Sunday, April 17 on oil exports from the El-Feel oilfield in the country’s southwest, putting further pressure on supplies.
Brent hit $114.84 and WTI increased to $109.81 during intraday trading on Monday.
On Wednesday, prices picked up again over tight supply worries from Russia and Libya.
Libya’s NOC on Monday also declared a force majeure on oil exports from the country’s largest oilfield, the El-Sharara. And production cuts from Libya supported an upward oil price trajectory as it declared another force majeure in a new oil field, Brega, on Tuesday.
The state-owned company conveyed in a statement that oil production had been halted until further notice after a group of unknown perpetrators entered the facility and prevented employees from working.
Additionally, a warning from the IMF on Tuesday over the economic impacts of the Russia-Ukraine war put pressure on prices. The global body advised that central banks worldwide act decisively against inflation as Russia's invasion of Ukraine raised global financial stability risks.
Brent reached as high as $109 on Wednesday while WTI hit $104.16.
Oil prices further increased on Thursday as global markets considered the possibility of an EU ban on Russian oil and gas.
EU discussions over banning Russian oil and gas and the German announcement of its plan to stop oil imports from Russia by the end of the year put prices under pressure on Thursday.
Brent ended the trading day at $108.33 and WTI closed at $103.79 on Thursday.
However, on Friday, oil prices fell over the possibility of US interest rate hikes, making oil more expensive and warding off investors. The COVID-19 lockdown in China also contributed to a weaker economic growth rate in support of lower prices.
By Zeynep Beyza Kilic