Oil prices fell in early trading, today, Monday, May 16th; This limited investors’ gains, due to concerns about supply at a time when the European Union is preparing to ban the import of Russian oil, and also with a limited increase in OPEC production.
The two benchmarks, which gained about 4% last Friday, had earlier risen more than $1 a barrel, with West Texas Intermediate crude reaching its highest level since March 28, at $111.71 a barrel.
The decline in oil prices comes with Moscow’s imposition, last week, of sanctions on a number of energy companies in Europe, which led to increased concerns about supply.
Oil Prices Now
Oil prices fell; Brent crude futures fell by about 0.75%, to $110.33 a barrel.
US West Texas Intermediate crude futures also fell by about 0.6%, to stand at $109.45 a barrel.
Meanwhile, US gasoline futures hit an all-time high; Low inventories fueled supply concerns.
Investors took profits after sharp gains, last Friday, but with the planned European Union embargo on Russian oil, and the slow increase in OPEC production, prices are expected to remain, said partner and expert at Mark Risk Advisory, Naohiro Nemura. Oil is close to current levels around $110 a barrel, until it falls late this year due to weak global demand.
Russian Oil Embargo
Reuters quoted 4 diplomats as saying that the European Union aims to agree on a phased embargo on Russian oil this month, despite concerns about supplies in Eastern Europe, rejecting proposals to delay or water down the proposals.
And OPEC+, which includes the Organization of the Petroleum Exporting Countries (OPEC) and its allies including Russia, has reduced the implementation of previously agreed plans to increase production, due to lack of investment in oil fields by some OPEC members, and Russian production losses recently.
The latest monthly report from OPEC showed that its production last April rose by 153,000 barrels per day to 28.65 million barrels per day, missing the increase of 254,000 barrels per day allowed by OPEC under the OPEC + agreement.
Oil Crisis In China
China also processed about 11% less crude oil than the previous year, with daily productivity dropping to the lowest level since March 2020.
And oil refineries in China reduced their operations due to weak demand due to widespread closures as a result of the resurgence of the Corona pandemic.
Rising oil prices drag down Indian stocks
The chief analyst at Fujitomi Securities in Japan, Kazuhiko Saito, said that oil prices will continue to rise, especially WTI contracts in the near term; US gasoline prices continued to rise amid weak imports of petroleum products from Europe.