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NEW DELHI : Oil prices declined on Tuesday as the prolonged lockdowns in China raised concerns of falling demand from the major oil importing country.

Analysts also said that tightening monetary policies and rise in interest rates have also fuelled fears of a global growth slowdown, which has further weighed on the oil prices.

At 11.20 am, the July contract of Brent futures on the Intercontinental Exchange was trading at $105.32, lower by 0.59% from its previous close. Similarly, the July contract of the West Texas Intermediate (WTI) on the NYMEX fell 0.50% to $102.57 per barrel.

Ravindra Rao, head of commodity research at Kotak Securities said that crude prices were weighed down by demand concerns amid increasing challenges for Chinese economy.

“Also weighing on price is European Union’s struggle to get member approval for the proposed ban on Russian crude exports. Fed’s monetary tightening stance is also weighing on commodities at large," he said.

The price of the commodity also came under pressure after Saudi Arabia cut prices of oil for Asian customers, said Rahul Kalantri, vice president for commodities at Mehta Equities.

“Crude oil prices also slipped amid rise in the US dollar and bond yields. The dollar index is hovering near 20 year highs and US 10-year bond yields are also trading near four year highs and pushed global commodities lower. Crude oil also fell due to China’s fragile economy, after data showed exports rose just 3.9% on year in April, after a blistering 14.7% gain in March," Kalantri said.

The slowdown came as Covid lockdowns hit supply chains and closed factories, adding to worries about growth in the world’s second largest economy.

Despite the volatility in the global oil prices, retail prices of petrol and diesel in India have remained unchanged for over a month now. In Delhi, petrol is sold for 105.41 per litre, while the cost of diesel stands at 96.67 a litre.

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