Oil prices fall, weighed down by dollar, China lockdowns

A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant

LONDON, May 9 (Reuters) – Oil prices slipped on Monday alongside equities and weighed down by a strong dollar and demand concerns on the back of continued coronavirus lockdowns in China, the world top oil importer.

Brent crude fell $1.83, or 1.6%, to $110.56 a barrel by 0953 GMT. U.S. West Texas Intermediate crude was at $107.7 a barrel, down $2.07, or 1.9%. Both contracts have gained over 40% so far this year.

The dollar hitting a fresh two-decade high made oil more expensive for holders of other currencies.

Global financial markets have been spooked by concerns over interest rate hikes and recession worries as tighter and wider COVID-19 lockdowns in China led to slower export growth in the world’s No. 2 economy in April. read more

In Russia, oil output rose in early May from April and production has stabilised, Deputy Prime Minister Alexander Novak was cited as saying, after output fell in April in the wake of Western sanctions imposed over the Ukraine crisis.

Crude imports by China fell 4.8% in the first four months compared with last year, but included a nearly 7% rise in April. read more

On the supply side, Saudi Arabia, world’s top oil exporter, lowered crude prices for Asia and Europe for June. read more

Last week, the European Commission proposed a phased embargo on Russian oil, boosting Brent and WTI prices for the second straight week. However, the proposal requires a unanimous vote among EU members this week, which has yet to transpire. read more

The EU proposal was followed by a pledge by G7 nations on Sunday to ban or phase out Russian oil imports. Washington also imposed new sanctions. read more

Japan, part of G7 and one of the world’s top five crude importers, will ban Russian crude imports “in principle”, Prime Minister Fumio Kishida said, adding this would take time. read more

Additional reporting by Florence Tan; editing by David Evans

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