Crude oil fell about 4% on Monday to its lowest level in two weeks amid growing concerns about the outlook for global energy demand amid the ongoing Covid19 lockdown in Shanghai and possible price hikes.
“The prospect of slower economic growth this year amid rising U.S. interest rates … has already prompted downward revisions to oil demand forecasts,” said analysts at consultancy Eurasia Group.
They also stated that “the longer the war in Ukraine and the lockdowns in China last, the greater the risk that demand growth will be even weaker”.
The Covid19 lockdown in Shanghai has dragged on for a fourth week, while orders for mass testing in Beijing’s largest district have sparked fears the Chinese capital could be set for a similar trajectory.
THAT China is the world’s largest oil importer. Brent futures fell $4.33, or 4.1%, to close at $102.32 a barrel, while US crude oil (WTI) fell $3.53, or 3.5%, to close at $98.54.
Both benchmarks closed at their lowest levels since April 11 after losing almost 5% last week. Since hitting their highest level since 2008 in early March, prices have fallen about 25%.