FX.co ★ Oil Prices Decline On China Demand Concerns

Oil prices fell on Monday as fears over slowing China demand overshadowed concerns over tight global supply.

Brent crude futures for June delivery dropped half a percent to $111.20 a barrel, while U.S. West Texas Intermediate futures for June settlement were down 0.4 percent at $105.92.

China's Q1 GDP data topped forecasts but economic growth remained below this year's official target amidst a surge in COVID-19 cases which prompted top business hubs like Shanghai to enforce prolonged lockdowns.

The economy slowed sharply in March, with major indicators showing slower increases. Retail sales growth turned negative due to the COVID outbreak in many cities. China refined 2 percent less oil in March than a year earlier, with throughput falling to the lowest since October.

Meanwhile, supply concerns persist due to the developments in Libya and Russia.

Two Libyan ports have been forced to stop loading of crude oil after protests against the Prime Minister, Abdul Hamid Dbeibah. The stoppage of work at El Feel is expected to bring down the crude oil production by 70,000 barrels a day.

As the Russia-Ukraine war entered the eighth week, multiple explosions apparently caused by missiles struck the western Ukrainian city of Lviv early today.

The "powerful" air strikes in the west came hours after President Volodymyr Zelensky accused Moscow of wanting to "destroy" the entire eastern region of Donbas near the border with Russia.

Russia is a major producer of crude oil in the world and is likely to face more sanctions on oil exports from European nations.