Oil prices fell sharply on Monday, with Brent closing below $ 100 a barrel for the first time since mid-March.
The price dip comes as concerns intensify that China’s massive lockdowns in controlling COVID-19 cases will seriously hurt economic activity and therefore demand. Shanghai, a city of 26 million people and the financial center of China, has come under severe lockdown as authorities try to curb the spread of the virus. The cases, however, set a new record on Sunday, exceeding 26,000, without a clear timetable for when the lifting of restrictions will begin. At the same time, Guangzhou, with a population of more than 10 million, announced that it had begun imposing severe restrictions to curb the spread of the coronavirus.
On the board, the May delivery contract lost $ 3.97 or 4% and closed at $ 94.29 a barrel on the New York Mercantile Exchange. This is the lowest level since February 25.
At the same time, Brent crude for June delivery fell $ 4.30, or 4.2%, to $ 98.48 a barrel, the lowest level since March 16.
Price pressures have also been triggered by the International Energy Agency (IEA) countries’ plan to release record amounts from their strategic reserves.
IEA members, including the United States, plan to release 240 million barrels of oil over the next six months to fill the gap left by the collapse in demand for Russian oil.
Source: Capital
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