Oil prices accumulated two straight weeks of declines as lockdowns in China is still sparking demand fears.
Brent crude slide 3.8% and West Texas Intermediate crude futures shed 3.7% at the start of Monday’s trading session. Both international benchmarks are standing just under $100 per barrel.
If the ongoing covid surge in China gets worse the impact on oil markets could be substantial according to analyst. While China is the world’s largest oil importer, Russia’s role as a key oil and gas exporter is fueling more uncertainty to the markets.
Since Russia invaded Ukraine WTI peaked at $130 and Brent to $139 by mid-March, sending some industry experts speculating if a $200 barrel was likely.
While the U.S has been leading sanctions against Russia, European countries are more cautious. A possible embargo was still being discussed in Luxembourg, a challenging situation since Europe buys every day about $21.84 million worth of coal from Russia and $928 million on oil and gas.
International Energy Agency country members are releasing 120 million barrels from emergency stockpiles, half of them from the U.S, in the most recent effort to alleviate soaring prices.
Now, with the lockdown in China and uncertainty on how the Ukraine invasion will further impact markets, the coming days for oil traders are expected to be as volatile as the international prices.