Oil Hits 1-Week Low As EU Eases Russian Sanctions, US Demand Concerns Grow

Oil fell in Asia trading on Monday morning, dragged by the European Union (EU) easing sanctions on Russian oil and growing demand concerns in the United States ahead of a possible rate hike later this week.

Price Movement: West Texas Intermediate (WTI) futures fell 0.8% and were trading below the $94/barrel mark to hit a one-week low. Brent Futures, too, slipped 0.83% to $97.56/barrel.

Also Read: US Dollar Pares Losses Against Major Peers As Potential 75 Bps Fed Rate Hike Looms

Supply Side Developments: In order to limit global energy security risks, EU member states had agreed to adjust sanctions under which Russian state-owned companies Rosneft RNFTF Gazprom OGZPY ship oil to third countries, Reuters reported.

Russian Central Bank Governor Elvira Nabiullina said on Friday that the country would not supply oil to nations choosing to impose price caps.

Libya’s National Oil Corporation intends to take oil production back to 1.2 million barrels per day in two weeks.

Expert Take: Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd., said the market tone is likely to remain bearish amid worries that interest rate hikes would slash global fuel demand and that the resumption of some Libyan crude oil output would ease tightness in global supply, CNBC reported.