Profit sales by investors slashed oil prices, supply concerns still remain
Oil prices slumped on Monday as investors profited from the previous session's gain, even though it was overshadowed by supply fears with the European Union's study preparing an import ban on Russian crude and the limited rise in OPEC production.
Brent crude futures fell $1.66, or 1.5%, to $109.89 at 0356 GMT, while West Texas Intermediate (WTI) crude futures fell $1.55, or 1.4%, to $108.94 a barrel.
Both indicators climbed more than $1 a barrel, up nearly 4% last Friday, with WTI hitting its highest level since March 28 at $111.71.
Investors made a profit with a sharp gain last Friday.
Still, with the EU's planned ban on Russian oil and the slow rise in OPEC production, oil prices are expected to remain near $110 a barrel until late this year amid weakening global demand.
Last week, Moscow developed a counterattack by imposing sanctions on several European energy companies, raising concerns about supply.
The Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, are falling short of previously agreed production increase plans due to insufficient investment in oil fields and recent production losses in Russia.
OPEC's latest monthly report showed production rose 153,000 barrels per day (bpd) in April to 28.65 million barrels, lagging behind the 254,000 barrels approved under the OPEC+ deal.
Adding to the supply pressure, China processed 11% less crude oil in April than the previous year, and daily production fell to the lowest level since March 2020. Refineries curtailed operations on-demand, weakened by widespread COVID-19 quarantines.
Meanwhile, U.S. gasoline futures hit an all-time high on Monday as falling inventories added to supply concerns.
Oil prices, especially WTI's short-term contract, will continue to rise as US gasoline prices continue to rise as imports of petroleum products from Europe weaken.
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