- Brent, WTI Reverse Gain, Resume Slide
- Oil has fallen four out of five in recent weeks
- Keystone pipeline closed, Russia threatens to cut production
SINGAPORE/LONDON, Dec. 12 (Reuters) – Oil prices fell on Monday, exacerbating a multi-week decline as a weakening global economy offset supply woes due to the closure of a key pipeline supplying the United States and Russia’s threat of a production reduction .
Brent oil futures were down 38 cents, or 0.4%, to $75.72 a barrel at 09:00 GMT. US West Texas Intermediate crude cost $70.76 a barrel, down 26 cents or 0.3%.
Last week, Brent and WTI fell to their lowest levels since December 2021 amid concerns that a potential global recession will affect oil demand.
China, the world’s largest crude oil importer, continued to relax its strict zero-COVID policy, though the streets in the capital Beijing remained quiet and many businesses remained closed over the weekend.
On Monday, queues formed at fever clinics in the cities of Beijing and Wuhan, where COVID first emerged three years ago.
Oil markets are likely to remain volatile in the near term amid uncertainty about the impact on Russian production of the EU ban, headlines about China’s COVID policies and central bank moves in the US and Europe. analysts in a note.
UBS said it believed Brent should recover above $100 a barrel in the coming months amid supply constraints and rising demand, while OPEC+ would keep supply tight.
On Sunday, Canada’s TC Energy (TRP.TO) said it had not yet determined the cause of the leak in the United States’ Keystone oil pipeline last week. It gave no timeline on when the pipeline would be operational again.
The Keystone Line, with a capacity of 622,000 barrels per day, is a critical thoroughfare that ships heavy Canadian crude oil to US refineries.
Russian President Vladimir Putin said on Friday that Russia could cut production and refuse to sell oil to a country that imposes a “stupid” price cap on Russian exports.
The Saudi energy minister also said on Sunday that price cap measures have not yet produced a clear result.
“The emerging EU embargo on Russian crude oil… may carry moderate upside energy price risks in the coming months. But supply uncertainty should ease by spring 2023, after the embargo on oil products (on February 5) is played out,” Deutsche Bank said in a note.
Reporting by Florence Tan and Emily Chow in Singapore; Edited by Christian Schmollinger, Bradley Perrett and Simon Cameron-Moore
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