Oil prices fell on Monday as concerns about weak economic growth in China, the world’s top oil importer, outweighed fears of potential supply stress from a potential European Union ban on Russian crude.
Brent crude futures fell 71 cents, or 0.6%, to $106.43 a barrel at 0801 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell 70 cents, or 0.6%, to $103.99 a barrel. Markets in Japan, India and across Southeast Asia were closed for public holidays on Monday.
Prices fell after China released data on Saturday showing that factory activity in the world’s second-largest economy contracted for a second month to its lowest since February 2020 because of COVID lockdowns.
“A slowing to that extent, when China is already suffering from a property bust and worries about its (until recently) increased regulation, is potentially a major issue for commodity markets and the world economy,” said Tobin Gorey, a Commonwealth Bank commodities analyst, in a note.
On the supply side, Libya’s National Oil Corp (NOC) said on Sunday it would temporarily resume operations at the Zueitina oil terminal to reduce stockpiles in storage tanks to avert an “imminent environmental disaster” at the port.