By Gina Lee

Investing.com – Oil was down on Tuesday morning in Asia, opening lower earlier in the session. European Union’s (EU) decision to ban Russian oil imports from its territory, which would reduce global supply, was met with.

By 12:17 ET (5:00 GMT), the price of $114.03 was down 0.8% and $111.60 by 0.20%.

EU foreign ministers failed in their attempts on Monday to get Hungary to lift its veto of the bloc’s proposed oil embargo on Russia in response to the invasion of Ukraine on Feb. 24. This means that the EU does not have the support and full agreement of the EU’s member nations in order to put into effect the embargo.

On the demand side, investors continued to digest Monday’s Chinese data that showed the economy processed 11% less crude oil in April than a year earlier. Due to lower consumption, the daily throughput dropped to its lowest level since March 2020 due to COVID-19 lockdowns.

As Chinese demand falls, U.S. producers increase production to replace inventories that are shrinking due to COVID-19 and the conflict in Ukraine. Inventories in the Strategic Petroleum Reserve fell to 538 million barrels, the lowest since 1987, according to Monday’s data from the U.S. Department of Energy.

Meanwhile, oil output in the Permian in Texas and New Mexico, the biggest U.S. shale oil basin, is due to rise 88,000 barrels per day (bpd) to a record 5.219 million bpd in June 2022, the U.S. Energy Information Administration (EIA)’s productivity report said on Monday.

Investors await the announcement, expected later today.