Oil prices fall on China's weak economic data

Oil prices fell on Monday as widespread lockdowns in China and weak economic data in the country fuelled fears of a global recession, though the market found some support as the European Union stepped closer to an import ban on Russian crude.

Brent crude LCOc1 was down 28 cents, or 0.3 per cent, at $111.27 a barrel at 0934 GMT, and U.S. West Texas Intermediate (WTI) crude CLc1 slipped 9 cents, or 0.1 per cent, to $110.40 a barrel.

The fall of oil prices "is chiefly due to the weak Chinese economic data, as the lockdown measures are having a direct impact on the world’s second-largest market," said Barbara Lambrecht, energy analyst at Commerzbank.

It is estimated that 46 cities in China are under lockdowns, hitting shopping, factory output and energy usage.

Latest Chinese data showed retail sales in April shrank almost 11 per cent from a year earlier, while factory production fell 2.9 per cent year-on-year.

In line with the unexpected industrial output decline, China processed 11 per cent less crude oil in April, with daily throughput the lowest since March 2020.

However, oil prices found some support as the European Union's diplomats and officials expressed optimism about reaching a deal on a phased embargo of Russian oil despite concerns about supply in eastern Europe.

German Foreign Minister Annalena Baerbock said the bloc would need a few more days to find agreement.