Oil prices fell on Monday as widespread lockdowns in China and weak Chinese economic data stoked fears of a global recession, although the market found some support as the European Union edged closer to a ban on imports of Russian crude.

Brent crude was down 72 cents, or 0.7%, at $110.83 a barrel at 12:36 GMT, and US West Texas Intermediate (WTI) crude fell 58 cents, or 0.5%, at 109 $.91 a barrel.

The drop in oil prices “is mainly due to weak Chinese economic data, as containment measures have a direct impact on the world’s second largest market”, said Barbara Lambrecht, energy analyst at Commerzbank.

An estimated 46 cities in China are in lockdown, affecting purchasing, factory production and energy consumption.

The latest Chinese data showed retail sales in April were down nearly 11% from a year earlier, while factory production fell 2.9% year-on-year.

In line with the unexpected drop in industrial production, China processed 11% less crude oil in April, with daily throughput the lowest since March 2020.

However, oil prices found some support as diplomats and European Union officials expressed optimism that an agreement could be reached on a gradual embargo on Russian oil despite supply concerns. in Eastern Europe.

Austria expects the EU to agree on sanctions in the coming days, Foreign Minister Alexander Schallenberg said on Monday.

German Foreign Minister Annalena Baerbock said the bloc would need a few more days to reach an agreement.

“With a planned EU ban on Russian oil and a slow increase in OPEC production, oil prices are expected to remain close to current levels, near $110 a barrel,” said Naohiro Niimura, partner. at Market Risk Advisory.

Meanwhile, U.S. gasoline futures hit a record high again on Monday as falling inventories stoked supply concerns.

“Oil prices will remain bullish, especially the WTI short-term contract, as U.S. gasoline prices continued to rise amid falling petroleum product imports from Europe. “, said Kazuhiko Saito, chief analyst at Fujitomi Securities.