You are here: Home » International » News » Markets
Business Standard

Oil prices slide as investors take profit; supply fear still looms

"Investors scooped up profit after a sharp gain last Friday," said Naohiro Niimura, a partner at Market Risk Advisory.

Topics
Oil prices slip | Investors | OPEC output

Reuters  |  TOKYO 

Oil, Brent Crude, Oil Prices, Oil Companies
"Still, with a planned ban by the EU on Russian oil and slow increase in OPEC output, oil prices are expected to stay close to the current levels near $110 a barrel until they head lower late this year due to weakening global demand," he said.

Oil prices fell on Monday, paring early gains as took profit following a surge in the previous session, albeit in the shadow of supply fear as the European Union prepares an import ban on Russian crude and with limited increase in .

Brent crude futures were down $1.42, or 1.3%, at $110.13 a barrel at 0653 GMT, while U.S. West Texas Intermediate (WTI) crude futures were $1.10, or 1.0%, lower at $109.39 a barrel.

Both benchmarks, which jumped about 4% last Friday, earlier climbed by more than $1 a barrel, with WTI reaching its highest since March 28 at $111.71.

" scooped up profit after a sharp gain last Friday," said Naohiro Niimura, a partner at Market Risk Advisory.

"Still, with a planned ban by the EU on Russian oil and slow increase in OPEC output, oil prices are expected to stay close to the current levels near $110 a barrel until they head lower late this year due to weakening global demand," he said.

The European Union aims to agree a phased embargo on Russian oil this month despite concerns about supply in eastern Europe, four diplomats and officials said on Friday, rejecting suggestions of a delay or watering down proposals.

Last week, Moscow slapped sanctions on several European energy companies, causing worries about supplies.

Elsewhere OPEC+ - the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia - has been undershooting previously agreed plans for output increases due to under-investment in oilfields in some OPEC members and, more recently, losses in Russian output.

The latest monthly report from OPEC showed its output in April rose by 153,000 barrels per day (bpd) to 28.65 million bpd, lagging the 254,000 bpd rise that OPEC is allowed under the OPEC+ deal.

Adding to pressure, China processed 11% less crude oil in April than a year earlier, with daily throughput falling to the lowest since March 2020 as refiners slashed operations on weaker demand due to widespread COVID-19 lockdowns.

China's retail sales shrank 11.1% and industrial output fell 2.9% in April as lockdowns took a heavy toll on consumption, industrial production and employment, adding to fears the economy could shrink in the second quarter.

Meanwhile, U.S. gasoline futures set an all-time high again on Monday as falling stockpiles fuelled supply concerns. [EIA/S]

"Oil prices will remain bullish, especially WTI's near-term contract, as U.S. gasoline prices continued to rise amid weaker imports of petroleum products from Europe," said Kazuhiko Saito, chief analyst at Fujitomi Securities.

(Reporting by Yuka Obayashi; Editing by Kenneth Maxwell, Christopher Cushing and Emelia Sithole-Matarise)

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, May 16 2022. 16:01 IST
RECOMMENDED FOR YOU
.