- Brent, WTI reverse gains, resume slide
- Oil has fallen in four of the last five weeks
- Keystone pipeline shut down, Russia threatens to cut production
SINGAPORE/LONDON, Dec 12 (Reuters) – Oil prices fell on Monday, extending a multi-week slide, as a weakening global economy offset supply problems stemming from the shutdown of a key pipeline supplying the United States and Russia threats of output cuts.
Brent crude futures were down 38 cents, or 0.4%, at $75.72 a barrel by 0900 GMT. US West Texas Intermediate crude was at $70.76 a barrel, down 26 cents, or 0.3%.
Last week, Brent and WTI fell to their lowest since December 2021, on concerns that a possible global recession will affect oil demand.
China, the world’s biggest crude oil importer, continued to loosen its strict zero-Covid policy, even as the streets of the capital Beijing remained quiet and many businesses closed over the weekend.
On Monday, queues formed outside fever clinics in the cities of Beijing and Wuhan, where COVID first appeared three years ago.
“Oil markets are likely to remain volatile in the near term amid uncertainty about the impact on Russian output from the EU ban, headlines about China’s COVID policies and central bank moves in the US and Europe,” UBS analysts said in a note.
UBS said it expected Brent to rise above $100 a barrel in the coming months amid supply constraints and rising demand while OPEC+ will keep supplies tight.
On Sunday, Canada’s TC Energy ( TRP.TO ) said it had not yet determined the cause of the Keystone oil pipeline leak last week in the United States. It did not provide a timeline for when the pipeline would resume operations.
The 622,000-barrel-per-day Keystone line is a critical artery that sends heavy Canadian crude to U.S. refineries.
Russian President Vladimir Putin said on Friday that Russia may cut production and will refuse to sell oil to any country that places a “stupid” price ceiling on Russian exports.
Saudi Arabia’s energy minister also said on Sunday that price cap measures had not produced any clear results yet.
“The new EU embargo on Russian crude oil… may present moderate upside risks to energy prices in the coming months. But supply uncertainty should ease by spring 2023, after the embargo on oil products expires (February 5),” Deutsche Bank said in a note.
Reporting by Florence Tan and Emily Chow in Singapore; Editing by Christian Schmollinger, Bradley Perrett and Simon Cameron-Moore
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