Oil prices fell nearly $4 on Monday as concerns grew over slowing fuel demand in China, after authorities in Shanghai said they would shut down the country’s financial hub for nine days to conduct COVID-19 tests. 19.
Brent crude futures fell as low as $116.00 a barrel and were trading down $3.88, or 3.2 percent, at $116.77 by 0131 GMT.
And US West Texas Intermediate crude futures hit their lowest level ever at $109.30 a barrel, and fell $3.92, or 3.4 percent, to $109.98.
Both contracts rose 1.4 percent on Friday, marking their first weekly rise in three weeks, with Brent rising more than 11.5 percent and West Texas Intermediate crude up 8.8 percent.
“The Shanghai shutdown triggered a new sell-off from investors who were frustrated that they hoped to avoid such a shutdown,” said Kazuhiko Saito, chief analyst at Fujitomi Securities Co., Ltd.
The Shanghai city government said on Sunday that all businesses and factories would close or have employees work remotely as part of a two-phase lockdown for nine days, after the city set a new record for asymptomatic cases. .
Public transportation, including shuttle services, will also be suspended during the lockdown, further reducing fuel demand.