WTI crude oil dropped about 3% to around $74 per barrel on Monday, sinking to the lowest levels since December last year as widespread protests in China over its strict zero-Covid policy hurt investor sentiment and the demand outlook.
Oil prices were also pressured by reports that the US granted Chevron Corp a license to resume oil production in Venezuela. The US oil benchmark has entered its fourth straight week of declines as Covid-related uncertainties in top crude importer China and mounting fears of a global recession gripped energy markets.
Meanwhile, traders continued to track developments surrounding a G7 plan to impose a price cap on Russian oil, though reports of a high price cap eased worries that Russia would retaliate by cutting supply.
Investors also remain cautious ahead of an OPEC+ meeting on Dec. 4 as the group of major producers is expected to keep supply tight.
While US stock futures fell on Monday, weighed down by weak global sentiment following news of growing unrest in China over Covid restrictions, while subdued Black Friday shopping in the US added to the bearish mood.
Futures contracts tied to the three major indexes were all trading in negative territory. In last week’s holiday-shortened trading, the major averages finished higher as the Federal Reserve signaled that it would likely slow the pace of interest rate hikes
Also China The Shanghai Composite dropped 1.1% to below 3,070 while the Shenzhen Component fell 1% to 10,790 on Monday, with mainland stocks hitting multi-week lows as protests against China’s strict Covid restrictions spread across cities, weighing on the outlook for the world’s second-largest economy. Goldman Sachs said China may end its zero-Covid policy earlier than anticipated with some chance of a “disorderly” exit due to growing discontent, though fears of a government crackdown continued to roil markets.