The oil prices they sank 6% on Monday along with stocks, weighed down by a strong dollar and demand concerns due to prolonged coronavirus lockdowns in China, the world’s top importer.
The Brent lost $6.45, or 5.70%, to $105.94 a barrel, while the West Texas Intermediate in United States (WTI) fell $6.68, or 6.1%, to $103.09 a barrel. Both contracts have gained more than 35% so far this year.
Global financial markets have been hit by concerns about interest rate hikes and recession, as the tightening and widening of Covid-19 lockdowns in China led to lower export growth in April.
“The Covid lockdowns in China are severely impacting the oil market, which is going through a selloff in line with equity markets,” said Andrew Lipow, president of Lipow Oil Associated in Houston.
China’s oil imports in the first four months of 2022 fell 4.8% from the same period a year ago, although purchases rose almost 7% in April.
In Russiaoil production increased in early May compared to April, stabilizing, according to Deputy Prime Minister Alexander Novak, after having fallen as a result of Western sanctions imposed by the Ukraine crisis.
On the supply side, Saudi Arabiathe world’s leading oil exporter, lowered oil prices for Asia and Europe in June.
Last week, the European Comission proposed a gradual embargo on Russian oil, which boosted oil prices Brent and of WTI for the second consecutive week. However, the proposal requires a unanimous vote among bloc members this week, which has not yet occurred.
kg