Oil fell on Monday under pressure from worries over slowing demand in China, although worries over tight global supply and the deepening crisis in Ukraine kept Brent crude above $111 a barrel.
China’s economy slowed in March as consumption, housing and exports took a hit, dusting faster-than-expected first-quarter growth numbers and worsening an outlook already clouded by COVID-19 restrictions and the war in Ukraine was weakened.
Brent crude, the global benchmark, fell 26 cents, or 0.2%, to $111.44 at 1055 GMT, slipping from the highest level since March 30 of $113.80 set at the start of the session. US West Texas Intermediate was down 11 cents, or 0.1%, at $106.84.
“Some Asian investors posted gains on concerns about slowing demand in China,” said Satoru Yoshida, commodities analyst at Rakuten Securities.
Data on Monday also showed that China refined 2% less oil in March than a year earlier, with throughput falling to the lowest level since October as soaring crude prices squeezed margins and strict lockdowns hit demand.
Oil rose to its highest level since 2008 in March, with Brent briefly topping $134 as Moscow’s invasion of Ukraine added to supply concerns over sanctions against Russia and buyers avoiding Russian oil.
To add pressure on the supply side, Libya’s National Oil Corp. on Monday force majeure at the Zueitina oil port, warning that “a painful wave of closures” had begun to hit its facilities. Libya halted production from its El Feel oil field on Sunday.
“With global supply so tight now, even the smallest disruption is likely to have an outsized impact on prices,” said Jeffrey Halley, an analyst at brokerage firm OANDA.
Russian production fell 7.5% in the first half of April from March, Interfax reported on Friday, and EU governments said last week the bloc’s executive branch is drafting proposals to ban Russian crude.
These comments came before an escalation in the Ukraine war. Ukrainian authorities said rockets hit Lviv and explosions rocked other cities early Monday as Russian forces continued their bombardments after claiming near-total control of the port of Mariupol.