Oil slips on China demand concerns while EU weighs Russia oil ban

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Oil prices fell on Tuesday in a second day of weak trading in Asia, pushed in opposite directions by China’s COVID-19 lockdowns, which could weigh on fuel demand and supply prospects affected by a possible European oil embargo on Russia.

Brent Crude Futures fell 23 cents to $107 a barrel, ending the day’s gains in holiday-reduced trading in China, Japan and parts of Southeast Asia.

US West Texas Intermediate (WTI) crude futures similarly fell 24 cents to $104 a barrel, after hitting an intraday high of $105.

Both benchmark contracts rose more than 40 cents on Monday and extended those gains modestly in early trading on Tuesday.

Beijing, reporting dozens of new cases daily in an outbreak that has entered its second week, is mass-testing residents to avert a lockdown similar to Shanghai’s over the past month.

Restaurants in the capital of the world’s top oil importer were closed for dining in, while many other venues were closed and streets were quiet on Tuesday during a five-day Labour Day holiday.

The European Commission is expected to finalise work on Tuesday on a sixth package of European Union (EU) sanctions against Russia over its actions in Ukraine, which would include a ban on buying Russian oil.

The embargo may spare Hungary and Slovakia, both heavily dependent on Russian crude, two EU officials said on Monday.

Tight fuel product supplies are adding to demand for crude, which helped to drive up Brent and WTI by more than 40 cents on Monday after a volatile session.

Traders will be closely watching U.S. inventory data. The American Petroleum Institute industry group will report stockpiles for the week ended April 29 on Tuesday, followed by government data from the Energy Information Administration on Wednesday.

 

 




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