By Laura Sanicola

(Reuters.) – On Tuesday, oil prices were lower as a result of European Union attempts to prohibit Russian imports. The move, which would tighten the global supply, was met with resistance by Hungary.

Futures dropped 35 cents or 0.3% to $113.89 per barrel at 0004 GMT. U.S. West Texas Intermediate crude crude futures declined 52 cents or 0.5% to $113.68 per barrel.

On Monday, the EU’s foreign ministers gave up trying to pressurize Budapest into lifting its veto on a Russian oil embargo. This was in response to Ukraine’s invasion. A bloc would need to be approved by all EU members.

China’s demand data showed that China was the second-largest economy, processing 11% less in April than it did a year ago. The tight COVID-19 lockdown led to a reduction of daily throughput, which fell to the lowest levels since March 2020 after refiners reduced operations due low consumption.

While Chinese demand falls, producers in America are increasing production in an effort to replace inventories that had dwindled after Russia’s war in Ukraine. Moscow refers to it as a “special military operation”.

According to Monday’s productivity report by the U.S. Energy Information Administration on Monday, oil output from the Permian (Texas and New Mexico), the largest U.S. shale basin, is expected to increase 88,000 barrels per daily (bpd), to a new record 5.219 millions bpd for June.

The Strategic Petroleum Reserve inventories fell to 538,000,000 barrels on Monday according to U.S. Department of Energy data. It was the lowest inventory since 1987.