MELBOURNE – Oil prices fell on Monday in holiday-sapped trade in Asia as concerns about weak economic growth in China, the world’s top oil importer, outweighed fears of potential supply stress from a looming European Union ban on Russian crude.
Brent crude futures fell $1.13, or 1.1%, to $106.01 a barrel at 05:11 GMT, while US West Texas Intermediate (WTI) crude futures fell $1, or 1%, to $103.69 a barrel. Markets in Japan, India and across Southeast Asia were closed for public holidays on Monday.
Prices fell after China released data on Saturday showing that factory activity in the world’s second-largest economy contracted for a second month to its lowest since February 2020 because of COVID lockdowns.
“A slowing to that extent, when China is already suffering from a property bust and worries about its (until recently) increased regulation, is potentially a major issue for commodity markets and the world economy,” said Tobin Gorey, a Commonwealth Bank commodities analyst, in a note according to Reuters.
On the supply side, Libya’s National Oil Corp (NOC) said on Sunday it would temporarily resume operations at the Zueitina oil terminal to reduce stockpiles in storage tanks to avert an “imminent environmental disaster” at the port.
NOC in late April declared force majeure on some shipments at Zueitina as political protesters forced a number of oil facilities to suspend operations.
Limiting the down side for oil prices is a possible dent in supply with the European Union leaning towards banning imports of Russian oil by the end of the year, two EU diplomats said after talks between the European Commission and EU member states on the weekend.
