Title: Oil falls on China demand worries, possible EU ban on Russia oil eyed

May 09, 2022 02:16AM ET

By: AnalysisWatch

Oil prices fell along with stock markets in Asia on Monday, driven by weak data from China and concerns that a global recession could reduce oil demand, as investors await European Union talks on a Russian oil embargo that could curb global supplies.

Brent crude had lost 41 cents, or 0.4 percent, to $111.98 a barrel by 02:03 AM ET.

U.S. West Texas Intermediate crude was selling at $109.24 a barrel, down 53 cents, or 0.5%. Both contracts briefly moved into positive territory after falling more than $1.

Global financial markets were also plagued by concerns about rising interest rates and fears of a recession, as China's tightening and broader COVID-19 freeze in April led to a slowdown in export growth in the world's second-largest economy.

Oil imports into China, the world's largest oil importer, rose nearly 7% in April from a year earlier, although imports fell 4.8% in the first four months from a year earlier.

The price cut by Saudi Arabia also reflected concerns about global oil demand, Teng said.

Saudi Arabia, the world's top oil exporter, on Sunday cut crude prices for Asia and Europe for the month of June.

The European Commission last week proposed a phased embargo on Russian oil as part of its toughest sanctions package yet over the conflict in Ukraine, pushing up Brent and WTI crude prices for a second week in a row. However, EU members must unanimously approve the proposal this week.

The EU proposal was followed on Sunday by the G7 countries, which pledged to ban or phase out Russian oil imports. Washington also imposed new sanctions on Gazprombank executives and other companies.

Bulgaria has previously said it will seek an exemption from the proposed ban on Russian oil imports if such exemptions are granted. But it was not clear whether it was seeking a full exemption or a delay similar to the one proposed Friday for Hungary, Slovakia and the Czech Republic.