Oil prices slip in second day of thin trade in Asia

Oil prices slip in second day of thin trade in Asia

MELBOURNE: Oil prices slipped on Tuesday May 5 in a second day of thin trading in Asia, pulling in opposite directions by China's COVID 19 lockdowns, which could weigh on fuel demand, and prospects for a European oil embargo on Russia.

The price of crude fell 23 cents, or 0.2 per cent, to US $107.35 a barrel at 0532 GMT, wiping out gains earlier in the day in trading that were hampered by holidays in China, Japan and parts of Southeast Asia.

The US West Texas Intermediate WTI crude futures dropped 24 cents, or 0.2 per cent, to US $104.94 a barrel, after hitting an intraday high of US $105.80.

Both benchmark contracts went up more than 40 cents on Monday and extended their gains modestly in early trade on Tuesday.

There is a positive driver for the EU embargo and whether that will be announced, according to Commonwealth Bank commodities analyst Vivek Dhar.

Your negative driver is Chinese COVID lockdowns. The outbreak that has entered its second week is a mass-testing of residents in Beijing to avert a lockdown similar to Shanghai's over the past month, according to reports of dozens of new cases daily.

Restaurants in the capital of the world's top oil importer were closed for dining in, while streets were quiet on Tuesday during a five-day Labour Day holiday.