Brent raw futures contract fell 79 cents, or 0.8%, to $103.60 a barrel by 0037 GMT while US West Texas Intermediate crude was at $98.45 a barrel, down 82 cents, or 0.8%. Both contracts slid $1 when the market opened on Monday.
The United Nations brokered a two-month truce between the Saudi-led coalition and the Iran-aligned Houthi group for the first time in the seven-year conflict. Saudi Arabic oil The facilities were hit by the Houthis during the conflict, adding to supply disruptions from Russia.
“This is a threat to supply, and a ceasefire would reduce that threat to supply,” said Phil Flynn, an analyst at Price Futures Group.
Oil and Gas Condensation Quantity No. 2 exporter in the world fell to 11.01 million bpd (bpd) in March, from an average production of 11.08 million bpd in February, industry sources said. Russian refining and exports have been hit by Western sanctions and buyer aversion after Russia’s invasion of Ukraine. Estimates of the loss of Russian oil supply range from 1 million to 3 million barrels per day.
Oil prices fell about 13% last week after US President Joe Biden announced that up to 1 million barrels per day of oil would be sold from the US Strategic Petroleum Reserve (SPR) for six months starting May. Mr. Biden said the release, the third in the last six months, would act as a bridge until domestic producers were able to boost output and bring supply back into balance with demand.
The US Department of Energy officially outlined the sale of oil from emergency reserves while members of the International Energy Agency also agreed to reveal more oil on Friday.
“Combined efforts by the US and its allies may temporarily balance the supply shortfall in 2022, but it may not be,” said Tina Teng, market analyst at CMC Markets APAC & Canada. long-term solution”.
“Also, US oil producers may be reluctant to increase output to keep margins high.”
Despite calls from Biden for US energy companies to ramp up production, rig count growth remains slow as drillers continue to return. shareholder from higher crude oil prices rather than boosting production.
Demand concerns in China, the world’s top oil importer, persist as the most populous city Shanghai has extended its COVID-19 lockdown.
China’s Ministry of Transport expects a 20% drop in land traffic and a 55% drop in flights over the three-day Qingming holiday due to the outbreak of COVID-19 cases in the country.