Crude oil prices fell in Asia on Monday on lingering concerns about an extended COVID-19 lockdown in Shanghai and a possible rise in U.S. interest rates that could weaken global economic growth and spur demand.
- Brent crude fell $1.90, or 1.8%, to $104.75 a barrel.
- WTI crude futures fell $1.89, or 1.9%, to $100.18 a barrel.
“Negative sentiment outweighs concerns about tight global supply as China continues to lock down in Shanghai and investors are gearing up for several US interest rate hikes. But I don’t expect oil prices to drop below $90 a barrel. Because it is likely that the EU will ban Russian oil amid the escalating Ukraine crisis,”Hiroyuki Kikukawa, Nissan’s general manager of research said.
According to analysts, the worsening of the crisis in Ukraine could increase pressure on the EU to impose sanctions on Russian oil, and the price could rise later this year.
Russia is the largest gas producer in Europe and the second largest oil exporter in the world after Saudi Arabia.
On the supply side, U.S. energy companies brought new oil and gas rigs online for the fifth straight week in the face of high prices and government pressure.
In Europe, the Russian-Kazakh Caspian Pipeline Association (CPC) has fully resumed exports since April 22 after a nearly 30-day interruption due to repairs at one of its main facilities.
Morgan Stanley also raised its forecast for Brent crude oil prices in the third quarter by $10 a barrel to $130 as the deficit has widened this year. This is due to lower supply from Russia and Iran, which is expected to exceed short-term excess demand.
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Monday, April 25, 2022