US oil fell 6.7% to a two-week low of $95.28 a barrel on Monday. Crude oil ended the day 3.5% lower at $98.54 a barrel, its first close below $100 since April 11. Global benchmark Brent crude fell about 4%.
“The prevailing sentiment today is bearish due to the China Covid shutdown,” Andy Lebow, president of Lipow Oil Consulting, wrote in an email Monday.
Chaoyang District, one of the largest districts in the Chinese capital, Beijing, announced on Sunday that it will launch mass testing for people who live and work in the district.
“It appears that rising shutdowns and shutdowns will increasingly reduce demand in one of the world’s leading oil consumers,” said Matt Smith, senior oil analyst, Americas, at Kpler Analytics.
While the focus is now on oil demand, traders are on high alert for further disruptions to Russian oil supplies that could push prices higher again.