Oil prices fall on China's weak economic data | Inquirer Business
Close  

Oil prices fall on China’s weak economic data

/ 09:47 PM May 16, 2022
Oil prices fall on China's weak economic data

FILE PHOTO: An aerial view shows an Idemitsu Kosan Co. oil facility in Ichihara, east of Tokyo, Japan November 12, 2021, in this photo taken by Kyodo. Mandatory credit Kyodo/via REUTERS

LONDON — Oil prices fell on Monday as widespread lockdowns in China and weak Chinese economic data fueled fears of a global recession, though the market found some support as the European Union stepped closer to an import ban on Russian crude.

Brent crude was down 72 cents, or 0.7%, at $110.83 a barrel at 1236 GMT, and U.S. West Texas Intermediate (WTI) crude slipped 58 cents, or 0.5%, to $109.91 a barrel.

ADVERTISEMENT

The fall in oil prices “is chiefly due to the weak Chinese economic data, as the lockdown measures are having a direct impact on the world’s second-largest market,” said Barbara Lambrecht, energy analyst at Commerzbank.

It is estimated that 46 cities in China are under lockdowns, hitting shopping, factory output, and energy usage.

FEATURED STORIES

The latest Chinese data showed retail sales in April shrank almost 11% from a year earlier, while factory production fell 2.9% year-on-year.

In line with the unexpected industrial output decline, China processed 11% less crude oil in April, with daily throughput the lowest since March 2020.

However, oil prices found some support as the European Union’s diplomats and officials expressed optimism about reaching a deal on a phased embargo of Russian oil despite concerns about supply in eastern Europe.

Austria expects the EU to agree on the sanctions in the coming days, Foreign Minister Alexander Schallenberg said on Monday.

German Foreign Minister Annalena Baerbock said the bloc would need a few more days to find an agreement.

“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,” said Naohiro Niimura, a partner at Market Risk Advisory.

Meanwhile, U.S. gasoline futures set an all-time high again on Monday as falling stockpiles fueled supply concerns.

ADVERTISEMENT

“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.

RELATED STORY

Oil price rollback to be implemented, firms say

Subscribe to our business newsletter

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.
Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: China, Energy, EU, oil, Price, Russia
For feedback, complaints, or inquiries, contact us.

Subscribe to our business news

By providing an email address. I agree to the Terms of Use and
acknowledge that I have read the Privacy Policy.



© Copyright 1997-2022 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.