Oil Prices Fall to 2022 at the Lowest Level, as China Covid Protests Intensify

• Crude oil prices fell Monday due to the COVID-19 protests by China.
• Fear of unrest in the second-largest economy in the world shook market sentiment and sent shares in Hong Kong, China, plummeting.
• China reported 40,052 new local COVID-19 cases on Monday — a daily record high for the fifth straight day.

Protests against COVID-19 curbs by China rattled the markets in Asia early Monday morning, sending crude oil prices to a new low and Chinese markets plummeting.

After ten people were killed in the riots, the rare public display of disillusionment in China was triggered by the country’s Covid-zero policies. Xinjiang regionAn apartment fire claimed the lives of many. Online users attributed Covid restrictions to the inability to rescue people and blocking escape routes.

The accusations were denied by the authorities. However, anger erupted in China after the three-year-old period of tight pandemic controls.

The fear of unrest in China — and its potential impact on the world’s second-largest economy — hit market sentiment, sending Oil prices tumbling. China is also one the top oil importers in the world.

Benchmark US West Texas Intermediate crude oil futures were 2.9% lower at $74.09 a barrel at 12.02 a.m. Monday EST — their lowest level this year, while international benchmark Brent crude oil futures tumbled to an 11-month low, trading 2.8% lower at $81.35 a barrel.

The Hang Seng Index in Hong Kong was down 2% by midday while the Hang Seng China Enterprises Index went down 2.2%. The Shanghai Composite fell 1 while the Chinese yuan dropped 0.5% against the US dollar.

“The rising unrest of China as a result of protests taking place in various cities has led to greater reopening pressure from authorities, but any indications for reopening seem unlikely to be directed in light of current records high cases,” Yeap Jun Roong, a market strategist on the online trading platform IG, wrote Monday. 

“Any inaction by authorities from its Covid-19 policies potentially a catalyst to more downbeat atmosphere,” he said.

China reported 40,052 new local COVID-19 cases on Monday — a daily record high for the fifth straight day, according to the country’s National Health Commission.This number also includes asymptomatic cases.