© Reuters. FILE PHOTO: A sticker shows crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, USA November 22, 2019. Photo taken November 22, 2019. REUTERS / Angus Mordant
By Shadia Nasralla
LONDON (Reuters) – Oil prices fell on Monday along with equities, weighed down by strong dollar and demand concerns over continued coronavirus shutdown in China, the world’s largest oil importer.
fell $ 1[ads1].83, or 1.6%, to $ 110.56 per barrel by 0953 GMT. US West Texas Intermediate oil was at $ 107.7 a barrel, down $ 2.07, or 1.9%. Both contracts have increased by over 40% so far this year.
The dollar, which reached a new high in two decades, made oil more expensive for holders of other currencies. [MKTS/GLOB]
Global financial markets have been intimidated by concerns about interest rate hikes and recession concerns as tighter and broader covid-19 shutdowns in China led to lower export growth in the world’s No. 2 economy in April.
In Russia, oil production rose in early May from April and production has stabilized, Deputy Prime Minister Alexander Novak was quoted as saying, after production fell in April in the wake of Western sanctions imposed over the Ukraine crisis.
Crude oil imports from China fell 4.8% in the first four months compared to last year, but included an increase of almost 7% in April.
On the supply side, Saudi Arabia, the world’s largest oil exporter, lowered crude oil prices for Asia and Europe in June.
EU RUSSIA OIL EMBARGO
Last week, the European Commission proposed a step-by-step embargo on Russian oil, which increases 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 not yet happened.
The EU proposal was followed by a promise from the G7 countries on Sunday to ban or phase out Russian oil imports. Washington also introduced new sanctions.
Japan, part of the G7 and one of the world’s five best crude oil importers, will ban Russian crude oil imports “in principle”, said Prime Minister Fumio Kishida, adding that this would take time.