By Gina Lee
Investing.com – Oil was down on Tuesday morning in Asia as investors’ concerns about a possible recession and weaker consumption grew.
Brent oil futures fell 0.44% to $110.29 by 11:38 PM ET (3:39 AM GMT) and crude oil WTI futures were down 0.41% to $109.84.
Investors are concerned about the possible recession. Some of the world’s well-heeled flagged the risk of a worldwide recession at the annual Davos economic summit which began on May 22.
International Monetary Fund Managing Director Kristalina Georgieva said on Monday that she did not expect a recession for major economies but could not rule one out.
“Investors were selling off as they expected higher oil prices to dent consumption for fuels worldwide,” Fujitomi Securities Co. Ltd. analyst Toshitaka Tazawa told Reuters.
“But lingering concerns over tight global supply and hopes for demand recovery in China were providing some support,” he said, predicting Brent oil futures stay within a range of $105-$115 a barrel for a while.
China, the world’s largest oil importer, promises stimulus such as rolling out new investment projects. The country will offer more than 140 billion yuan ($21 billion) in additional tax relief to offset the heavy impact of lockdowns on businesses.
Shanghai is aiming to normalize life from June 1 as the number of COVID-19 infectious cases declines.
Meanwhile, the European Union is likely to agree on an embargo on Russian oil imports “within days”, according to Germany, the biggest member.
Investors now await U.S. crude oil supply data from the American Petroleum Institute, due later in the day.