Mar 28, 2022 02:41AM ET
By: AnalysisWatch
Oil prices fell more than $5 on Monday as fears grew about weaker fuel demand in China after the financial hub of Shanghai imposed a two-stage lockdown to contain a surge in COVID-19 infections.
The market entered another week of uncertainty weighed down by the war between Ukraine and Russia, the world's second-largest crude exporter, on the one hand, and the widening of COVID-related closures in China, the world's largest crude importer, on the other.
Brent crude futures slid as low as $115.32 a barrel to trade down $5.15, or 4.3%, at $115.50 at 03:31 ET.
West Texas Intermediate (WTI) crude futures in the United States fell to a low of $108.28 per barrel and were trading $5.30, or 4.7 percent, lower at $108.60.
Both benchmark contracts rose 1.4 percent on Friday, posting their first weekly gains in three weeks, with Brent up 11.8 percent and WTI up 8.8 percent.
Analysts have mixed views on how much 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 suggest that 1 to 3 million barrels per day of Russian oil may not reach the market.
Russia, which describes its approach in Ukraine as a "special operation", exported 4.7 million barrels per day in 2021, making it the world's second-largest exporter after Saudi Arabia.
To ease the tight supply situation, the United States is considering a further release of oil from the Strategic Petroleum Reserve (SPR), which could be larger than the 30 million barrel sale earlier this month, a source said.
US drilling rigs were boosted for the 19th consecutive month, but at the slowest rate since 2020, although the government has ordered producers to raise production.
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