Oil prices are down more than 7%, with growing concerns regarding slowing fuel demand in China, as it imposes new restrictions in the country in order to contain the Corona pandemic.
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Brent crude futures fell $8.17, or 6.8%, to $112.48 on settlement
Oil prices fell more than 7% today, Monday, as concerns increased regarding a slowdown in fuel demand in China, following the authorities in Shanghai announced that they would implement a two-stage lockdown to contain the Corona pandemic.
Brent crude futures fell $8.17, or 6.8%, to $112.48 at the settlement. Meanwhile, US West Texas Intermediate crude futures fell $7.94 a barrel, or regarding 7% when settling to $105.96, following Brent increased this week by 12%, and West Texas Intermediate crude by 9%.
The Shanghai city government said that “all companies and factories will stop working or make employees work remotely within the framework of a two-phase closure over a period of 9 days, following the city set a new record for asymptomatic cases.”
Public transportation, including transportation services, will also be suspended during the closure, further reducing fuel demand.
The Organization of the Petroleum Exporting Countries and its allies, known as “OPEC +”, are scheduled to meet next Thursday. “OPEC +” has so far resisted calls from major consuming countries, including the United States, to increase production.
“OPEC +” has been increasing production by 400,000 barrels per day every month since August to mitigate the impact of the cuts that were made due to the impact of the pandemic on demand.
