Oil Slips as Investors Eye EU Vote on Russian Oil Ban

A sticker reads crude oil on the side of a storage tank in the Permian Basin in Mentone, Loving County, Texas, U.S. November 22, 2019. Picture taken November 22, 2019. REUTERS/Angus Mordant

Oil prices slipped in early Asian trade on Monday as investors eyed talks at the European Union on a Russian oil embargo that is expected to tighten global supplies.

Brent crude dropped 67 cents, or 0.6%, to $111.72 a barrel by 0002 GMT while U.S. West Texas Intermediate crude was at $109.02 a barrel, down 75 cents, or 0.7%.

Last week, both contracts rose for the second straight week on supply concerns after the European Commission proposed a phased embargo on Russian oil as part of its toughest-yet package of sanctions over the conflict in Ukraine. The proposal requires a unanimous vote among EU members.

Bulgaria's Deputy Prime Minister said late on Sunday that the country will veto EU oil sanctions on Russia if it does not get derogation from the proposed embargo.

The European Commission on Friday proposed changes to its planned embargo on Russian oil to give Hungary, Slovakia and the Czech Republic more time to shift their energy supplies, EU sources said.

"The talks will continue tomorrow, on Tuesday too, a meeting of the leaders may be needed to conclude them. Our position is very clear. If there be a derogation for some of the countries, we want to get a derogation too," Vassilev told national BNT television.

Global financial markets are also weighed down by concerns over interest rate hikes, possible recession and impact from China's COVID-19 lockdowns on the world's No. 2 economy.

Meanwhile, Saudi Arabia, world's top oil exporter, lowered crude prices for Asia and Europe for June on Sunday.