Oil slides as China lockdowns outweigh proposed EU Russia oil ban
Reuters
Published May 02, 2022 11:37PM ET
Updated May 03, 2022 03:16PM ET
By Nia Williams
(Reuters) -Oil prices fell by more than 2% on Tuesday as demand worries stemming from China's prolonged COVID-19 lockdowns outweighed the prospect of a European embargo on Russian crude.
Beijing is mass-testing residents to avert a lockdown similar to Shanghai's over the past month. The capital's restaurants were closed for dining in while some apartment blocks were sealed shut.
Brent crude settled down $2.61, or 2.4%, at $104.97 a barrel. U.S. West Texas Intermediate (WTI) crude ended $2.76, or 2.6%, lower at $102.41.
"There are real concerns about whether Chinese demand, which is a huge factor in global demand, will remain strong in 2022," said Gary Cunningham, director at Tradition Energy.
Prices remain high, however, with Brent crude having reached $139 in March for its highest since 2008 after Russia's invasion of Ukraine exacerbated supply concerns that were already driving a rally.
The European Union is working on a sixth round of sanctions against Russia, with officials saying that European Commission President Ursula von der Leyen is expected to spell out the plans on Wednesday, including a ban on imports of Russian oil by the end of this year.
Phil Flynn, an analyst at Price Futures group, said price action is likely to remain volatile as traders weigh the impact of China's lockdowns against the West's oil sanctions and ahead of a U.S. Federal Reserve meeting on Wednesday.
"We have a market that's in flux and reacting from headline to headline in a very choppy trading range," Flynn said.
Also in focus will be the latest round of U.S. inventory and supply reports. Nine analysts polled by Reuters estimated on average that crude inventories decreased by 800,000 barrels last week. [EIA/S]
The American Petroleum Institute industry group issues its inventory report at 4:30 p.m. EDT (2030 GMT), followed by government figures on Wednesday. [API/S]
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.