In afternoon trade, US benchmark West Texas Intermediate oil fell as low as $92.93 a barrel and European Brent crude hit $97.57
In afternoon trade, US benchmark West Texas Intermediate oil fell as low as $92.93 a barrel and European Brent crude hit $97.57
Oil fell on Monday on Chinese demand fears, the recent release of strategic reserves and fading hopes of a European embargo on Russian supplies following the Ukraine war.
In afternoon trade, US benchmark West Texas Intermediate oil fell as low as $92.93 a barrel and European Brent crude hit $97.57.
“The bad news from China in particular is weighing on prices, as the number of COVID-19 cases continues to rise sharply,” said Commerzbank analyst Barbara Lambrecht.
“The lockdowns slowing oil demand in the world’s second largest consumer country threaten to last even longer.”
Shanghai eased restrictions on some neighborhoods on Monday after growing outcry over China’s inflexible Covid-19 rules, which have locked down 25 million people and sparked fears over energy needs.
Rich countries, meanwhile, will tap another 120 million barrels of oil from emergency reserves to calm prices that have skyrocketed after Russia’s invasion of Ukraine, the International Energy Agency said last week.
The move included Washington’s recent announcement of the release of 60 million barrels.
“Oil prices are falling as traders continue to weigh the release of strategic reserves and the slowdown in Chinese demand,” City Index Fiona Cincotta added on Monday.
“The steady drip of … reserves is helping to calm supply fears and plugging up some of Russia’s supply that is not on the market.”
Kyiv wants the European Union to agree sanctions on Russian oil and gas in retaliation for Moscow’s attack on Ukraine.
Analysts warn that such a move could cause prices to recover higher from current price levels.
“Oil is likely to settle around these levels, unless of course the EU decides to ban Russian oil imports,” Cincotta told AFP.
“That would be a catalyst to push oil prices up again.”
The price of oil had risen to almost $140 a barrel in early March following Moscow’s attack on Ukraine.
Russia is a major crude oil supplier and a key member of the OPEC+ group of global producers.
