The negative economic data from China has caused oil prices to fall.
The negative economic data from China has caused oil prices to fall.
Oil prices dipped on Monday as worries of a worldwide recession were fueled by widespread Chinese lockdowns and disappointing Chinese economic statistics, yet the market found some support as the European Union moved closer to an import embargo on Russian petroleum.
Brent oil was down 72 cents, or 0.7 percent, to $110.83 a barrel, while WTI crude in the United States was down 58 cents, or 0.5 percent, to $109.91 a barrel.
"The disappointing Chinese economy statistics, as the lockdown measures are having a direct influence on the world's second-largest market," said Barbara Lambrecht, energy analyst at Commerzbank.
Lockdowns are said to be in place in 46 Chinese cities, affecting retail, manufacturing productivity, and energy use.
Retail sales in April in China decreased over 11% from a year earlier, while manufacturing output declined 2.9 percent.
China processed 11% less crude oil in April, the lowest daily throughput since March 2020, in keeping with the predicted drop in industrial activity.
However, oil prices found some support as the European Union's diplomats and officials indicated hope about achieving an agreement on a phased embargo of Russian oil amid worries over supplies in eastern Europe.
Foreign Minister Alexander Schallenberg said on Monday that Austria expects the EU to agree on penalties in the coming days.
Annalena Baerbock, Germany's foreign minister, said the union will need a few more days to reach a deal.
"Oil prices are projected to continue close to current levels around $110 a barrel, with a proposed EU embargo on Russian oil and a modest rise in OPEC supply," said Naohiro Niimura, a partner at Market Risk Advisory.
Meanwhile, on Monday, U.S. gasoline futures hit a new high as declining inventories fueled supply fears.
"Oil prices will stay positive, particularly WTI's near-term contract," said Kazuhiko Saito, chief analyst at Fujitomi Securities, "as U.S. gasoline prices continued to grow with lower imports of petroleum products from Europe."
