Crude oil futures ended lower on Tuesday (3rd) as investors weighed the prospect of the European Union embargoing Russian crude oil and the hit to demand from China’s epidemic prevention lockdown.
energy commodity prices
- Delivered in June WTI CrudeFutures fell $2.76, or 2.6 percent, to settle at $102.41 a barrel.
- Delivered in July Brent CrudeFutures fell $2.61, or 2.4 percent, to settle at $104.97 a barrel.
- Natural gas futures for June delivery rose 6.4% to settle at $7.954 per million Btu.
- Gasoline futures for June delivery fell 0.3% to settle near $3.501 a gallon.
- Delivered in JuneThermal Fuel FuturesPrices fell 2.9 percent to settle at $4.083 a gallon.
market driving force
The Associated Press reported that although the number of new confirmed cases is at a low level, Beijing is raising new hospital facilities to cope with the surge in cases. Market concerns regarding Beijing’s closure of the city and long-term restrictions on movement in Shanghai have triggered the world’s largest market response to this issue. Crude oil demand concerns in oil importing countries.
Edward Moya, senior market analyst at Oanda, said in a note: “Crude prices are falling as Beijing tightens its containment controls and tanker tracking data shows increased flows of Russian crude. Energy traders don’t believe the EU can really push the Russian oil embargo. “
Crude oil trading got a boost in turbulence on Monday, as the market was worried regarding the impact of oil demand caused by China’s epidemic prevention, but further signs that the European Union will impose an embargo on Russian oil masked the market’s worries regarding Chinese demand.
Germany last week dropped its opposition to an embargo on Russian oil and officials instructed that Europe’s largest economy is preparing to move to find alternative energy sources in the coming months.
“The oil embargo may be simple, but the details are complex, and it may be difficult to find a way to get rid of Russian oil without causing a surge in prices,” said Stephen Innes, managing partner at SPI Asset Management.
“Fortunately, the peak of the heating season is over, but that won’t solve the problem of backfilling Russia’s lost oil, which means the EU will remain sluggish, hoping for U.S. shale production to return to pre-pandemic levels and OPEC to catch up with its output. Quotas to alleviate some shortages somewhat.”
