Crude Oil prices fell further on Monday, owing to concerns that continued COVID-19 lockdowns in Shanghai and expected rate hikes in the United States would stifle global economic development and fuel demand.
Brent crude prices were down USD1.90, or 1.8 percent, to USD104.75 a barrel, while WTI crude futures were down USD1.89, or 1.9 percent, to USD100.18 a barrel in early trade. Last week, demand concerns caused the benchmarks to drop nearly 5 percent.
"As China resumed lockdowns in Shanghai and investors anticipated for a succession of US rate hikes, bearish sentiment outweighed concerns about constrained global supply," said Hiroyuki Kikukawa, general manager of research at Nissan Securities. Investors are attempting to alter their positions ahead of the start of the summer driving season in the United States later in May, he said. "However, due to the risk of a potential European Union ban on Russian oil amid a deepening Ukraine crisis, oil prices are not projected to fall below USD90 a barrel," he said.
Shanghai authorities are erecting barriers outside residential buildings to combat a COVID-19 pandemic, generating further public outrage over a lockdown that has confined majority of the city's 25 million inhabitants indoors.
When the Federal Reserve meets in May to approve the next in what is likely to be a succession of hikes this year, Chairman Jerome Powell has said that a half-point increase "will be on the table."In the supply side, U.S. energy companies added oil and natural gas rigs for the fifth week in a row, despite high prices and government pushing.
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