The Corona pandemic has again affected oil prices, after the Eastern European crisis dominated the markets during the past weeks.
Oil prices were affected by the repercussions of the Corona pandemic, which strongly affected some areas in China, specifically in Shanghai.
Oil prices fell nearly 4% on Monday to their lowest level in two weeks, as concerns grew about the outlook for global energy demand due to prolonged shutdowns to curb Covid-19 in Shanghai and possible increases in US interest rates.
Analysts at the Eurasia Group Consulting said, “The possibility of slowing economic growth this year amid increases in US interest rates … has already led to a downward revision of the outlook for oil demand,” noting that “the longer the Ukraine war and the continued closures in China, the higher the risk that the growth of Demand will be weaker.”
The COVID-19-related lockdowns in Shanghai entered their fourth week, while orders for mass testing in Beijing’s largest district raised fears that the Chinese capital could face a similar fate.
China is the world’s largest oil importer.
Brent crude contracts ended the trading session as low as $4.33, or 4.1%, to settle at $102.32 a barrel.
US West Texas Intermediate crude contracts fell $3.53, or 3.5 percent, to settle at $98.54 a barrel.
Both benchmarks closed at their lowest level since April 11, after losing about 5% last week.
Since jumping to their highest level since 2008 in early March, prices have collapsed by about 25%.
Oil was also pressured by the rise of the US dollar to its highest level in two years against a basket of competing currencies due to the possibility of increases in US interest rates. A stronger dollar makes oil more expensive for holders of other currencies.