LONDON (Reuters) – Last week, oil prices fell to near two-week lows, extending last week’s loss. There were more fears that long COVID-19 lockdowns in Shanghai and possible interest rate rises in the US would hurt global economic growth and oil consumption.
Authorities in Shanghai have constructed fences around residential houses, igniting further public outrage. Many people in Beijing have been stockpiling food in case there is another shutdown like the one that happened a few times.
“It seems as if China is the lone elephant in the room,” said Jeffrey Halley, an analyst at OANDA. “Today’s mood was sabotaged by Shanghai’s tightening COVID-zero restrictions and suspicions that Omicron has spread to Beijing.”
Brent crude was down $4.63, or 4.3 percent, to $102.02 per barrel at 09:13 GMT, having previously reached $101.94, the lowest level since April 12. Texas Intermediate (WTI) crude decreased by $4.11, or 4%, to $97.96.
Oil prices have also fallen as a result of the likelihood of increased US interest rates, which has boosted the value of the US dollar. A strong dollar makes dollar-priced goods more expensive for people who don’t use dollars. It can also be a sign that investors are more afraid of taking risks.
Both oil benchmarks fell roughly 5% last week on demand worries, and Brent has fallen dramatically after touching a record high of $139 last month.
Oil has been bolstered by a scarcity of supplies. Russia’s invasion of Ukraine has already cut supplies as a result of Western sanctions and consumers’ avoiding Russian oil, but the market might become tighter as a result of a possible EU embargo on Russian crude.
“Smart sanctions” against Russian oil imports are being discussed by the European Union, according to Valdis Dombrovski, the executive vice president of the European Commission, in a report in the Times on Monday.
Libyan power outages are also assisting. In the last few days, the OPEC member has lost about 550,000 barrels per day because of bad things happening. The Zawiya oil refinery was damaged by violent conflicts.
