Oil Slumps as Shanghai Shuts to Curb Covid Surge

OIL PRICE - MELBOURNE. Oil prices fell more than $3 in early trade on Monday on prospects of a drop in fuel demand in China after authorities in Shanghai said they would shut the country's financial hub for a COVID-19 testing blitz over nine days.

Brent crude futures dropped as low as $116.18 and were trading down $2.75, or 2.3%, at $117.90 a barrel at 2215 GMT.

U.S. West Texas Intermediate (WTI) crude futures hit a low of $109.90 shortly after opening and were down $2.60, or 2.3%, at $111.30. Both benchmark contrasts had risen 1.4% on Friday.

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Shanghai's city government said on Sunday all firms and factories would suspend manufacturing or have people work remotely in a two-stage lockdown over nine days, after the city reported a new daily record for asymptomatic COVID-19 infections.

Sapping fuel demand further, public transport, including ride-hailing services, will also be suspended during the lockdown.

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