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Oil futures fell Tuesday, under pressure on continued worries about the global economic outlook and COVID-19 lockdowns in China.
Price action
-
West Texas Intermediate crude for June delivery
CL.1,
-0.71% CLM22,
-0.67%
fell 72 cents, or 0.7%, to $102.37 a barrel on the New York Mercantile Exchange after dropping more than 6% on Monday. -
July Brent crude
BRN00,
-0.80% BRNN22,
-0.80% ,
the global benchmark, was down 94 cents, or 0.9%, at $105 a barrel on ICE Futures Europe. -
June natural gas
NGM22,
-2.93%
shed 3.6% to trade at $6.852 after a 12% tumble on Monday. -
June gasoline
RBM22,
-0.94%
fell 1% to $3.605 a gallon, while June heating oil
HOM22,
+0.56%
ticked up 0.2% to $3.8419 a gallon.
Market drivers
Oil extended a slump seen Monday following a round of weak Chinese trade data that underlined worries about the country’s COVID-19 lockdowns and their impact on crude demand. A steep selloff for equities, which saw the S&P 500
SPX,
post its lowest finish since March 31, 2021, added to pressure on crude.
The inability of the European Union to quickly agree to a plan for implementing a ban on Russian oil imports has also weighed on the market, said Warren Patterson, head of commodities strategy at ING, in a note.
“It looks as if the latest sanction package will need to be watered down in order to be approved by all members. Already, there are reports that the EU has dropped part of the proposal which would have banned EU-owned tankers from shipping Russian oil to destinations outside the EU,” he wrote.
Hungary has continued to demand more in the way of assistance to help it transition away from Russian energy. News reports have said that a proposed compromise would allow Hungary and other Eastern European EU members to phase out Russian oil by the end of 2024, as opposed to the end of the year.
French European Affairs Minister Clement Beaune on Tuesday said he thought a deal could be completed this week, noting that French President Emmanuel Macron was due to speak to Hungarian leader Viktor Orban, Reuters reported.
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