Oil slides to 2-week lows as Shanghai lockdowns stoke demand worries
Oil prices slumped to about two-week lows on Monday, extending losses from last week, as concerns grew that prolonged COVID-19 lockdowns in Shanghai and potential U.S. rate hikes would hurt global economic growth and demand for fuel.
Brent crude futures were down US $3.93, or 3.7%, at US $102.72 a barrel by 0644 GMT. They touched US $102.47 earlier in the session, the lowest since 12 April.
U.S. West Texas Intermediate (WTI) crude futures fell US $3.80, or 3.7%, to US $98.27 a barrel, having skidded earlier to $98.05, also the lowest since April 12.
The benchmarks lost nearly 5% last week on demand concerns.
“Oil is rerating lower due to the China consumption hit while the Federal Reserve is raising interest rates to slow down the US economy,” SPI Asset Management Managing Director Stephen Innes said in a note.
Shanghai authorities battling an outbreak of COVID-19 have erected fences outside residential buildings, sparking a fresh public outcry over a lockdown that has forced much of the city’s population of 25 million indoors.
U.S. Federal Reserve Chairman Jerome Powell has indicated that a half-point interest rate increase “will be on the table” when the Fed meets in May.
On the supply side, U.S. energy firms added oil and natural gas rigs for a fifth straight week amid high prices and prodding by the government.
In Europe, the Russia-Kazakh Caspian Pipeline Consortium was resuming full exports from April 22 after almost 30 days of disruptions following repairs on one of its key loading facilities, three sources told Reuters on Friday.
