AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Crude oil prices tumbled on Monday.
- Crude oil prices were already on fire after Yemen's Houthis launched an attack on Saudi energy facilities on Friday.
- The US is considering options to release oil from Strategic Petroleum Reserves that, if carried out, could be bigger than the sale of 30 million barrels earlier this month.
Crude oil prices tumbled more than US$3/bbl during the initial trading sessions on Monday on expectations of lower fuel demand after Chinese authorities stated that they would shut the country's financial hub - Shanghai for COVID-19 testing blitz over nine days.
Oil prices rose earlier on Friday to surpass US$120/bbl as traders reconciled the impact of a missile attack on an oil distribution facility in Saudi Arabia.
The prices started their rally on Tuesday after several European Union members considered an option to impose sanctions on Russian oil. The rally continued on Wednesday too with both benchmarks gaining more than 5% following reports that crude exports from Kazakhstan's Caspian Pipeline Consortium (CPC) terminal had completely halted due to storm damage.
Source: Refinitiv Eikon
On Monday, June delivery Brent Crude oil futures declined and last traded at US$114.15 per barrel down 2.74%, while May delivery WTI crude oil futures exchanged hands at US$110.34 per barrel, down 3.13% at 12:51 PM AEDT.
Also Read: Crude oil surges to 14-year highs on delays in Iranian talks
Rising COVID-19 cases in China
Shanghai’s city government stated on Sunday that all firms and factories would suspend manufacturing or have staff work remotely in a two-stage lockdown over nine days. The significant decision came as the city reported a new daily record for asymptomatic COVID-19 infections.
The prices were already on fire after Yemen's Houthis launched an attack on Saudi energy facilities on Friday. The attack came just five days after the Houthi group fired missiles and drones at Saudi energy and water desalination facilities.
Must Watch: As Russia-Ukraine War Intensifies, Commodities Also Soars
Meanwhile, the US is considering options to release oil from Strategic Petroleum Reserves that, if carried out, could be bigger than the sale of 30 million barrels earlier this month.
Furthermore, a possible revival of Iran’s export restrictions may help to cool the immense tight supplies of crude oil in the international market.
Both oil benchmarks have been rallying steadily since the beginning of the war between Russia and Ukraine on 24 February 2022. The US along with its allies slapped heavy sanctions on Russian oil imports, disrupting the global oil trade.
Also Read: Crude oil slides from multi-year highs as Iran talks rev up
Bottom Line
Crude oil prices tumbled significantly on Monday on expectations of lower fuel demand after Chinese authorities stated that they would shut Shanghai city over rising COVID-19 cases.
Here’s how commodities performed in the last week click here
