Crude lost more than 3% on Monday and hit a two-week low, on concerns over prolonged lockdowns over the Covid-19 in Shanghai and possible increases in interest rates in USAwhich could hurt global growth and oil demand.
In Shanghai, authorities erected fences outside residential buildings, provoking new protests. In Beijing, many began stockpiling food, fearing a similar lockdown after a few cases emerged.
The Brent Crude it fell $4.33, or 4.06%, to $102.32 a barrel. The West Texas Intermediate in United States (WTI) gave up $3.53, or 3.46%, at $98.54.
Contracts had lost nearly 5% last week. Since soaring in early March to their highest since 2008, prices have plunged about 25 percent.
“Shanghai shows no signs of abandoning its strict “Covid zero” policybut promises to tighten enforcement of restrictions, which could further hurt oil demand,” City Index’s Fiona Cincotta said of the city in China, the world’s biggest oil importer.
The crude also weakened on the prospect of a rise in interest rates in USA, which is boosting the dollar. A strong US currency makes commodities more expensive for buyers with other currencies and tends to reflect greater risk aversion among investors.
The Petroleum was buoyed earlier in the year by supply shortages after Russia’s February 24 invasion of Ukraine caused customers to shun Russian oil due to Western sanctions.
But the market could tighten further if the European Union bans Russian crude.
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