The price of Brent crude oil fell by almost 3% in Asian trading on Monday morning and amounted to about 81 dollars per barrel. This is the lowest price for Brent oil since the beginning of the year and is mainly due to protests in China against strict restrictions on COVID-19.
This raises concerns about weakening demand in the world’s largest oil importer.
Oil prices may remain lower for longer unless production cuts occur or the United States increases oil purchases to replenish its strategic oil reserves.
Concerns about China’s economic growth have also hit commodity trade in Asia.
US oil fell by 2.81% to 74.14 dollars per barrel.
The COVID regulations and subsequent protests have raised concerns that the economic blow to China will be greater than expected.
“Even if China is on track to eventually move away from its zero-covid approach, low vaccination rates among the elderly mean the exit is likely to be slow and possibly messy,” CBA analysts said on Monday .
“The economic impact is unlikely to be small.” – Additional reporting by Reuters
