Oil Prices Fall to 2022’s 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 and other Asian countries 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 were heard in China early Monday morning, causing markets to panic in Asia. US crude oil prices fell to a new low this year, and Chinese markets to tumble.

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

Although the allegations were denied by authorities, the incident caused anger in China to flare up after three years of strict pandemic restrictions.

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 a top oil importer.

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.

At midday, Hong Kong’s Hang Seng Index fell by 2%, while Hang Seng China Enterprises Index fell 2.2%. The Shanghai Composite fell 1 and the Chinese Yuan fell 0.5% against the US dollar.

“The rising unrest in China has resulted in greater reopening pressures for authorities, but any indications that reopening might be guided in light current record high cases seems unlikely,” Yeap Jun Roong, a market strategist on the online trading platform IG, wrote Monday. 

The Chinese markets may remain volatile over the coming week, he stated. “Any inaction from the authorities to change its Covid-19 policy could be a catalyst for a more downbeat atmosphere.”

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 includes asymptomatic cases.