Oil prices extend losses as Shanghai lockdowns hit demand outlook

div classBodysc17zpet90 cdBBJodivpBy Yuka Obayaship

pTOKYO Reuters – Oil prices extended losses on Monday amid persistent worries that prolonged COVID19 lockdowns in Shanghai and potential U.S. rate hikes would dent global economic growth and fuel demand.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pBrent crude futures slid 1.90, or 1.8, to 104.75 a barrel at 0015 GMT, while U.S. West Texas Intermediate WTI crude futures fell 1.89, or 1.9, to 100.18 a barrel.p

pThe benchmarks lost nearly 5 last week on demand concerns.p

p“Bearish sentiment outweighed concerns over tight global supply as China continued lockdowns in Shanghai and investors prepared for a series of U.S. rate hikes,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.p

pInvestors are trying to adjust their positions before the U.S. summer driving season kicks off later in May, he said.p

p“But oil prices are not expected to fall below 90 a barrel due to the prospect of a potential ban by European Union on Russian oil amid a deepening Ukraine crisis,” he said. p

pShanghai authorities battling an outbreak of COVID19 have erected fences outside residential buildings, sparking fresh public outcry over a lockdown that has forced much of the citys 25 million people indoors.p

pThe U.S. Federal Reserve Chairman Jerome Powell has indicated that a halfpoint interest rate increase “will be on the table” when the Fed meets in May to approve the next in what are expected to be a series of hikes this year.p

pOn the supply side, U.S. energy firms added oil and natural gas rigs for a fifth straight week amid high prices and prodding by the government.p

pIn Europe, the RussiaKazakh Caspian Pipeline Consortium CPC was resuming full exports from April 22 after almost 30 days of disruptions following repairs on one of its key loading facilities, three sources familiar with the port loading plan told Reuters on Friday.p

pStill, some analysts say the worsening crisis in Ukraine could raise pressure on the EU to sanction Russian oil and prices could move higher later this year.p

pRussia is Europes top gas supplier and the worlds secondbiggest oil exporter after Saudi Arabia.p

pMorgan Stanley raised its thirdquarter price forecast for Brent by 10 per barrel to 130 citing a “greater deficit” this year due to lower supply from Russia and Iran, which is likely to outweigh shortterm demand headwinds.p

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pp Reporting by Yuka Obayashi Editing by Himani Sarkarp

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