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Oil slips further on demand, financial market worries -Breaking

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© Reuters. FILE PHOTO – A sticker reading crude oil is placed on the side of an underground storage tank located in Mentone in Loving County in Texas. It was erected in November 22nd, 2019. REUTERS/Angus Mordant

By Laura Sanicola

(Reuters] – On Tuesday oil prices dropped in Asian early trading, adding on to a 6% decline in the previous session. This was due to worries over the future demand outlook and coronavirus locks in China’s top oil importer.

At 0009 GMT, the price of $105.58 fell by 36 cents (0.3%) U.S. West Texas Intermediate crude oil fell 0.2% to $102.86 per barrel. The session saw prices drop by more than $1, but they recovered. The prices of both contracts remain up at 35% for the year so far.

Fears that Russia’s invasion of Ukraine will lead to further reductions in Russian oil imports are raising concerns among financial markets.

The European Commission last week proposed that the Russian oil supply be embargoed in phases. This would boost Brent and WTI for the second consecutive week. For the proposal to be adopted, it needs to receive unanimous approval from EU members.

According to a top economist, stopping Russian gas deliveries to Germany would cause deep recessions and affect half a billion jobs.

According to Reuters, the country’s government is quietly preparing for an abrupt halt in Russian gas supplies. This emergency package could also include the control of crucial firms.

Hungary also reiterated its stand that it would not agree to a second round of sanctions against Russia until all its concerns have been addressed.

Concerns over inflation hikes and worries about recession have also influenced global financial markets. China’s tighter COVID-19 lockdowns has led to slower growth of the No. 2 economy. In April, the country was ranked 2nd in terms of economic growth.

China’s crude imports in the first quarter of 2022 were 4.8% lower than a year ago. However, imports to April rose nearly 7%.

Wall Street stocks fell Monday while the dollar hit an unprecedented two-decade peak. Oil is now more expensive to other holders.

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