Global oil prices fell on Monday, May 9, along with stock markets in Asia, weighed by weak Chinese data and fears of a global recession that could double oil demand.
Oil prices fell as investors looked ahead to European Union talks on a Russian oil embargo, which could result in an agreement that could put more limits on global supplies.
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Analyst at “CMC Markets”, Tina Ting, said that fears related to the recession put sentiment in a state of fear of risk, in addition to the fact that the closure in China is one of the main factors that led to pressure on oil prices.
Oil Prices Today
Brent crude lost 2.5% of its value, bringing the price of a barrel down to $110.18, down from $112.39 at the end of Friday’s session.
The futures contracts for West Texas Intermediate crude – for delivery in June – decreased by 2.8%, to reach its price of 107.4 dollars per barrel.
On Friday, May 6, oil prices ended higher, one day after the OPEC + alliance decided to keep its production policy unchanged during next June.
Russian Oil Embargo
Although the benchmarks Brent and West Texas achieved gains over the past two weeks, supported by the European proposal to phase out Russian oil within 6 months, fears of a global supply decline caused oil prices to fall again.
The European Union announced in late April its intention to ban all shipping and insurance services provided to transport Russian oil, amid efforts to win the support of its 27 member states to pass the ban.
According to Reuters, there are concerns in global financial markets, about rising interest rates and fears of a recession, as the stricter and broader Corona lockdown in China slowed export growth in the world’s second economy over the past month.
Demand In China
Crude oil imports from China, the world’s largest oil importer, rose by about 7% in April compared to the previous year, despite the decline in imports for the first four months by 4.8% year-on-year.
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Experts believe that the decline in oil prices on the part of Saudi Arabia, also reflects concerns about global demand for oil.
On Sunday, May 8, Saudi Aramco – the largest oil exporter in the world – announced the reduction of crude oil prices for Asia and Europe for the month of June.