© Reuters.
By Ambar Warrick
Investing.com– Oil prices edged lower on Monday after a volatile week, as traders gauged concerns over slowing demand and U.S.-led price caps on Russian crude exports.
London-traded fell 0.3% to $92.14 a barrel, while U.S. fell 0.9% to $86.05 a barrel by 20:18 ET (00:18 GMT). Both contracts settled slightly lower after a volatile run last week, as a minimal supply cut by the Organization of Petroleum Exporting Countries and allies did little to offset fears of slowing demand in China.
Trade data showed that Chinese oil slowed substantially in August due to COVID-related disruptions in the economy.
This week, markets await more details on Washington’s planned price caps on Russian oil exports, which are expected to be imposed in December. Moscow has vowed to ramp up crude exports to Asia in response to the move- a trend that could potentially bring crude prices lower next year.
Oil prices plummeted from highs hit in the initial days of the Russia-Ukraine conflict this year as concerns over slowing global economic activity largely outweighed supply disruptions caused by the conflict.
But this trend may reverse in the winter, especially as the European Union winds down Russian oil imports. U.S. Treasury Secretary Janet Yellen warned that Americans could , and that the proposed price caps on Russian oil are intended to offset such a scenario.
The U.S. is steadily drawing on its Strategic Petroleum Reserve (SPR) to stabilize local gasoline prices, which surged to record highs earlier this year. This has seen the SPR fall to a 40-year low, with traders forecasting large gains in oil prices if the SPR draw is halted.
Gasoline demand in the U.S. has also remained steady.
Focus this week is also on upcoming U.S. data, due on Tuesday. The reading is likely to factor into the Federal Reserve’s plans to hike interest rates, which will be priced into crude markets.
Strength in the has weighed on crude prices this year, given that it makes importing oil more expensive. Major importers India and Indonesia in particular have felt the heat from a stronger greenback.
