Oil prices fell more than 5%, during trading on Monday, to reach the lowest level in two weeks; The shutdowns in Shanghai have fueled demand fears.
Oil prices continued their losses after ending their dealings last week with a decline of about 5%, with the growing fears of the prolonged closure of the Corona virus “Covid-19” in Shanghai and the possibility of interest rate increases in the United States; What will harm global economic growth and demand for oil.
Oil Prices Today
Brent crude futures prices – for June delivery – fell by 5.36%, to reach $100.95 a barrel, the lowest level since April 12.
The prices of West Texas Intermediate crude futures – June delivery – also decreased by 5.50%, to $ 96.41 a barrel, its lowest level since April 12.
The benchmark indexes lost nearly 5%, last week, due to concerns about demand.
Consumption In China
“Oil is falling again as consumption in China takes a hit while the Federal Reserve raises interest rates to slow inflation in the US economy,” Stephen Innes, managing director of asset management at SBI, said in a note.
Shanghai authorities, which are battling the outbreak of the Corona virus, have erected fences outside apartment buildings; That sparked fresh public anger over the lockdown that has forced many of the city’s 25 million residents to stay indoors.
The Actions Of The US Federal
US Federal Reserve Chairman Jerome Powell has indicated that a half-point rate increase “will be on the table” when the Fed meets in May.
On the supply side, US energy companies added new platforms to explore for oil and natural gas, for the fifth week in a row, amid rising prices and the government’s urging for companies to increase production.
Russia-Kazakhstan pipeline consortium fully resumed exports starting April 22 after nearly 30 days of disruption following repairs at a major loading facility.
Some analysts said the worsening crisis in Ukraine could increase pressure on the European Union to punish Russian oil, and that prices could rise later this year.
“Oil prices are not expected to fall below $90 a barrel due to the possibility of a possible EU ban on Russian oil amid the deepening Ukraine crisis,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
And the newspaper “The Times”, quoting the Executive Vice President of the European Commission, Valdis Dombrovskis, reported that the European Union is preparing “smart sanctions” against Russian oil imports.
Some analysts have suggested that Emmanuel Macron’s victory in the French presidential election may also boost oil prices.