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The price of oil and other key industrial commodities fell on Monday after Chinese government measures to stop the spread of the Delta variant scared investors about global demand for energy.
Brent crude oil, the global benchmark, fell 4% to $ 67.87 a barrel and West Texas Intermediate futures, the leading US benchmark, fell 4.3% to $ 65.38 a barrel. At these prices, both gauges were set at their lowest closing level in about 2.5 months.
The spread of cases of the Delta Covid-19 variant has raised alarm bells in China and other countries in East Asia. Beijing health officials said last week that the city would cancel all large-scale exhibitions and events for the remainder of August.
China is the world’s largest importer of oil and “while some countries seem to be learning to live with the coronavirus, it is adopting a zero tolerance policy” with stricter travel rules and quarantine measures, said Norbert Rücker, Head of Economics at Swiss Private Bank Julius Baer.
Customs data released over the weekend shows China imported less crude per day in July than in June and those figures were also weighing on prices, analysts at Dutch bank ING said.
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