Worried About Declining Demand, Oil Prices In Asia Weak

Illustration: Oil field. ANTARA/REUTERS/aa (Reuters)

JAKARTA - Oil prices slumped in early Asian trade on Friday, May 6 as concerns about an economic downturn that could dampen demand for crude competed with concerns over new sanctions from the European Union against Russia, including a crude oil embargo.

Brent crude futures were down 37 cents, or 0.3 percent, to trade at 110.53 dollars a barrel at 0015 GMT. U.S. West Texas Intermediate (WTI) crude futures fell 33 cents, or 0.3 percent, to trade at 107.93 dollars a barrel.

Britain's central bank (BoE) on Thursday, May 5 warned that Britain was at risk of a double recession and inflation above 10 percent as it raised interest rates to their highest level since 2009, increasing a quarter of a percentage point to 1.0 percent.

Meanwhile stocks on Wall Street fell as investors gave up riskier investments, worried the Fed will raise interest rates more this year to tame inflation. On the supply side, the Organization of the Petroleum Exporting Countries, Russia and allied producers, known as OPEC+ , agreed as expected for a moderate monthly increase in their oil production.

Ignoring calls from Western countries to raise production more, OPEC+ agreed to increase June output by 432,000 barrels per day, in line with its plans to ease restrictions put in place when the pandemic hit demand.

The EU sanctions proposal, which requires unanimous support from the 27 countries in the bloc, involves eliminating imports of Russian refined products by the end of 2022 and a ban on all shipping and insurance services to transport Russian oil.

A US Senate panel put forward a bill that could expose OPEC+ to lawsuits for collusion in increasing oil prices. Congress has failed to pass a version of the law for more than two decades, but lawmakers are concerned about rising inflation and high gasoline prices. This was reported by Antara.