May 16, 2022 03:16AM ET
By: AnalysisWatch
Oil prices fell on Monday, giving back their initial gains, as investors took profits after the rise in the previous session, albeit in the shadow of supply fears as the European Union prepares to ban imports of Russian crude and OPEC production increases are limited.
At 02:53 AM ET, Brent crude futures were $1.42, or 1.3%, lower at $110.13 a barrel, while U.S. West Texas Intermediate (WTI) crude futures were $1.10, or 1.0%, lower at $109.39 a barrel.
Both benchmarks, up about 4% last Friday, had earlier gained more than $1 a barrel, with WTI at $111.71, its highest since March 28.
The European Union intends to adopt a gradual embargo on Russian oil later this month despite concerns about supply in Eastern Europe, four diplomats and officials said Friday, dismissing suggestions that the proposals would be delayed or watered down.
Last week, Moscow imposed sanctions on several European energy companies, causing supply shortages.
Under the OPEC+ umbrella, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, have failed to meet previously agreed plans to increase output due to underinvestment in oil fields in some OPEC member countries and a recent decline in Russian output.
OPEC's latest monthly report shows that output rose by 153,000 barrels per day (bpd) in April to 28.65 million bpd, falling short of the 254,000 bpd increase allowed to OPEC under the OPEC+ agreement.
Adding to the pressure, China processed 11% less crude in April than a year earlier, with daily throughput falling to the lowest level since March 2020, as refineries curtailed operations due to weaker demand and widespread COVID-19 shutdowns.
Meanwhile, U.S. gasoline futures hit another all-time high on Monday as falling inventories fueled supply concerns.