Oil prices fall, dragged down by dollar, China shutdown By Reuters

Written by Shadia Nasrallah

LONDON (Reuters) – Oil prices fell on Monday along with stocks, weighed down by a stronger dollar and concerns about demand on the back of the ongoing coronavirus shutdown in China, the world’s largest oil importer.

It fell $1.83, or 1.6 percent, to $110.56 a barrel by 0953 GMT. US West Texas Intermediate crude scored 107.7 dollars a barrel, down 2.07 dollars, or 1.9 percent. Both contracts have gained more than 40% so far this year.

The dollar’s arrival at its highest level in two decades made oil more expensive for holders of other currencies. [MKTS/GLOB]

Global financial markets were spooked by concerns about rising interest rates and recession fears as the tighter and more widespread COVID-19 lockdown in China slowed export growth in the world’s No. 2 economy in April.

Russian Deputy Prime Minister Alexander Novak was quoted as saying that in Russia, oil production rose in early May from April and production stabilized, after production fell in April in the wake of Western sanctions imposed due to the Ukraine crisis.

China’s imports of crude oil fell 4.8% in the first four months from a year ago, but included a rise of nearly 7% in April.

On the supply side, Saudi Arabia, the world’s largest oil exporter, cut crude prices for Asia and Europe for the month of June.

European Union Russia Oil Ambargo

Last week, the European Commission proposed a phased ban on Russian oil, raising Brent and WTI prices for the second week in a row. However, the proposal requires a unanimous vote among EU members this week, which has yet to take place.

The EU proposal was followed by a pledge by the Group of Seven nations on Sunday to ban or halt Russian oil imports. Washington also imposed new sanctions.

Japanese Prime Minister Fumio Kishida said that Japan, which is part of the Group of Seven and one of the world’s top five importers of crude, would ban imports of Russian crude “in principle”, adding that it would take time.