Oil prices sink more than 5% on China demand fears

World oil prices sank more than five percent Monday on fears that China’s worsening Covid outbreak should slam demand from the essential electricity client.

Europe’s benchmark settlement Brent North Sea crude fell as low as $101.20 consistent with barrel and US WTI oil dropped to $96.85.

China is suffering to get a grip on a renewed Covid outbreak that has forced Shanghai — the US.’s biggest metropolis — into lockdown and dealt a blow to energy call.

Global markets have additionally been stung by the chance of a pointy increase in US interest rates.

“Market moods have deteriorated as the Covid situation in China is not improving and the media is hinting that Beijing could be next in line for a lockdown after Shanghai and several other major cities,” said XTB analyst Walid Koudmani.

“As China is the second-largest economy in the world, the situation … has a big impact on commodity markets with oil and industrial metals dropping significantly.”