RIYADH: Oil prices dropped on Tuesday, extending losses from the previous day as Ukraine and Russia headed for peace talks and on fears of a drop in fuel demand in China after the financial hub of Shanghai shut down to curb a surge in COVID-19 cases.
Brent crude futures were trading down $1.18, or 1.1 percent, at $111.30 a barrel at 0348 GMT, having dipped as low as $109.97.
US West Texas Intermediate crude futures hit a low of $103.46 in early trade and were down $1.09, or 1.0 percent, at $104.87. Both benchmark contracts lost around 7 percent on Monday.
OPEC+ set for only a slight output target increase
OPEC+ will likely stick to plans for a modest increase in oil output in May, several sources close to the group said, despite a surge in prices due to the Ukraine crisis and calls from the United States and other consumers for more supply.
Several consuming nations including the United States have urged producers to raise their output by more as crude prices have surged, hitting their highest since 2008 this month at over $139 a barrel.
But major OPEC members such as Saudi Arabia and the United Arab Emirates have held back on increasing their production targets, while OPEC+, a group that includes Russia, has steered clear of the topic of Ukraine.
OPEC+ has boosted output targets by 400,000 barrels per day each month since August 2021. From May 1, that monthly target increase will rise slightly to 432,000 bpd.
Rocket strikes oil depot in Ukraine's northwestern Rivne region
The governor of Ukraine’s northwestern Rivne region said Russian forces had carried out a rocket strike on an oil depot in the region on Monday.
In a short video address posted online, Governor Vitaliy Koval said emergency services were at the scene but did not give further details.
Sanctions impact: Russian oil firm shuffles Venezuela assets
A Russian oil company that used to provide a workaround to US oil trading sanctions on Venezuela is scrabbling to avoid another set of sanctions, documents show, this time from Europe and the United States over Russia’s invasion of Ukraine.
Roszarubezhneft was incorporated in 2020 and soon afterward acquired the Venezuelan holdings of Russian state-run oil giant Rosneft as Washington imposed sanctions on two of Rosneft’s units for trading Venezuelan oil.
The five joint ventures Roszarubezhneft acquired produce some 125,000 barrels per day of crude in Venezuela and employ some 200 Russian and local workers, according to sources and analysts. That is equivalent to about 16 percent of the 788,000 bpd that Venezuela produced last month.
And now, Roszarubezhneft is attempting to transfer ownership of its Venezuelan assets from its European units to another company in Russia to avoid “the blocking of the activities or the confiscation of assets of companies of the group.”
(With inputs from Reuters)
