Brent crude futures were trading down $3.09, or 2.6%, at $117.56, and U.S. WTI crude futures were down $3.28, or 2.9%, at $110.62
Oil prices fell more than $3 on Monday as fears over weaker fuel demand in China grew after its financial hub of Shanghai launched a planned two-stage lockdown on Monday to contain a surge in COVID-19 infections.
The market kicked off another week of uncertainty, buffeted on one side by the ongoing war between Ukraine and Russia, the world’s second-largest crude exporter, and the expansion of COVID-related lockdowns in China, the world’s largest crude importer.
Brent crude futures slid as low as $116.00 a barrel and were trading down $3.09, or 2.6%, at $117.56 at 0340 GMT.
U.S. West Texas Intermediate (WTI) crude futures hit a low of $109.30 a barrel, and were down $3.28, or 2.9%, at $110.62.
Both benchmark contracts rose 1.4% on Friday, notching their first weekly gains in three weeks, with Brent surging more than 11.5% and WTI climbing 8.8%.
Shanghai’s lockdown prompted a fresh sell-off from disappointed investors as they expected such a lockdown would be avoided, said Kazuhiko Saito, chief analyst at Fujitomi Securities Co Ltd.
China’s financial hub of Shanghai launched a planned two-stage lockdown of the city of 26 million people on Monday, closing bridges and tunnels, and restricting highway traffic in a scramble to contain surging local COVID-19 cases.
Analysts have varying estimates of how hard Russian oil exports could be hit by economic sanctions imposed on Moscow by the United States and its allies following Russia’s invasion of Ukraine. Some reckon that one million to three million barrels per day of Russian oil might not make it to the market.
Russia exports between 4 million and 5 million barrels of crude every day, making it the world’s second-largest exporter behind Saudi Arabia.