Crude oil down by more than one per cent on Tuesday as concerns about demand due to China’s extended Covid lockdowns outweighed support from a possible European oil bans on Russia over its actions in Ukraine.
Beijing, reporting dozens of new cases daily, is mass testing citizens to prevent a lockdown similar to Shanghai’s over the last month. The capital’s restaurants were closed for dining in, and some apartment blocks were closed. Brent crude was down $1.41 or 1.3% at $106.17 a barrel. U.S. West Texas Intermediate (WTI) crude also fell $1.82 or 1.7% to $103.35.
Brent reached $139 in March, its highest since 2008, after Russia’s invasion of Ukraine increased supply concerns that were already sustaining a rally. “The API report had people stop worrying about the demand side and start worrying about the supply side again,” said Phil Flynn, an analyst at Price Futures group.
The increasing expectation of EU sanctions on Russia grant support. The European Commission on Tuesday is expected to complete work on the coming package of EU sanctions against Russia, which would include a ban on buying Russian oil.
