Oil prices fall as China's COVID lockdown intensifies

Oil prices fell along with stocks by about 6% on Monday as ongoing coronavirus lockdowns in China, the biggest oil importer, fueled concerns over the demand outlook. Brent crude fell $6.45, or 5.7%, to $105.94 a barrel. US West Texas Intermediate Crude fell $6.68, or 6.1%, to settle at $103.09 a barrel. So far this year, both contracts are up about 35%. Global financial markets were spooked by concerns about rate hikes and recession concerns as tighter and broader COVID-19 lockdowns in China in April led to slower export growth in the world's second-largest economy. "The COVID lockdowns in China are having a negative impact on the oil market, which is selling off along with stocks," said Andrew Lipow, president of Lipow Oil Associated in Houston. China's crude oil imports fell 4.8% year-on-year in the first four months of 2022, but imports rose nearly 7% in April. China's Iranian oil imports in April fell short of peak volumes from late 2021 and early 2022 as demand from independent refiners eased after COVID lockdowns weighed on fuel margins and growing imports of cheaper Russian oil. Wall Street stock indices fell and the dollar hit a two-decade high, thereby making oil more costly for holders of other currencies. In Russia, oil production rose in early May from April and production stabilized, Deputy Prime Minister Alexander Novak was quoted as saying after production fell in April as Western countries imposed sanctions over the Ukraine crisis.

Source