Oil prices steadied on Monday as worries over slowing demand in China prompted investors to take profits on gains made earlier in the day on concerns over tight supply and the deepening Ukraine crisis.
Brent futures LCOc1 were up 27 cents, or 0.2%, at $111.97 a barrel at 0642 GMT, sliding from its highest since March 30 of $113.80 hit earlier in the session.
U.S. West Texas Intermediate futures CLc1 rose 20 cents, or 0.2%, to $107.15 a barrel, having risen as high as $108.55, the highest since March 30.
China's economy slowed in March as consumption, real estate and exports were hit hard, taking the shine off faster-than-expected first-quarter growth numbers and worsening an outlook already weakened by COVID-19 curbs and the Ukraine war.
The country refined 2% less oil in March than a year earlier, with throughput falling to its lowest level since October as a surge in crude prices squeezed margins and tight lockdowns hurt fuel consumption.
"Some Asian investors booked profits as they became worried about slowing demand in China," said Satoru Yoshida, a commodity analyst with Rakuten Securities.
Last Thursday, a day before Easter weekend holidays, both Brent and WTI climbed more than 2.5% on news that the European Union might phase in a ban on Russian oil imports.
EU governments said last week the bloc's executive was drafting proposals to ban Russian crude, but diplomats said Germany was not actively supporting an immediate embargo.
Those comments came before tensions grew in the Ukraine crisis, with authorities reporting multiple explosions in western and southern Ukraine on Monday as Russian forces claimed near full control of the strategic southern port city of Mariupol following almost two months of bloody fighting.
"Continued war between Russia and Ukraine with no signs of a ceasefire fuelled supply fears, especially as demand is expected to pick up as driving season nears in the northern hemisphere," said Chiyoki Chen, chief analyst at Sunward Trading.
The International Energy Agency had warned that roughly 3 million barrels per day (bpd) of Russian oil could be shut in from May onwards due to sanctions, or buyers voluntarily shunning Russian cargoes.
Russian oil production has continued to slide in April, declining by 7.5% in the first half of the month from March, the Interfax news agency reported on Friday.
Adding to pressure, Libya halted oil production from its El Feel oilfield on Sunday and two sources at Zueitina oil port said exports there had been suspended after protesters calling for Tripoli-based Prime Minister Abdulhamid al-Dbeibah to resign took over the sites.
U.S. oil production forecasts, however, are being revised upwards despite labour and supply chain constraints, as higher prices spur more drilling and well completion activity, according to industry experts.
(Reuters - Reporting by Yuka Obayashi; Editing by Kenneth Maxwell)
Subscribe
