World News

Oil prices fall below $100 a barrel amid lockdowns in China

Oil prices, on Monday, plunged 4 per cent amid concerns that the pandemic will cut demand in China.

Brent crude futures fell 4 5 per cent to $98.16 a barrel by 19:53 GMT +1, while U.S. West Texas Intermediate (WTI) crude dropped correspondingly over 4 per cent to $94.51.

Some cities in China had commenced lockdown as the country experienced its worst outbreak since the coronavirus started in central Wuhan in 2019.

Analysts at the Eurasia Group consultancy told Reuters that consumption in China, the world’s biggest oil importer, has stalled with coronavirus lockdowns in Shanghai.

Shanghai, China’s financial centre, started easing lockdowns in some areas on Monday despite reporting a record of more than 25,000 new COVID-19 infections.

“Even when the restrictions in Shanghai are lifted, China’s zero-Covid policies will likely remain a drag on demand,” Eurasia Group said, stressing Shanghai lockdowns likely reduced China’s overall oil consumption by up to 1.3 million barrels per day (bpd).

Last week, member nations of the International Energy Agency (IEA) planned to release 120 million barrels from their strategic stocks over six months to reduce rising oil prices.

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