The shock from the implementation of the closure measure in Shanghai has prompted a slump in crude oil trade earlier in the week, raising concerns over impending demand from China.
Towards the opening of the European session, Brent crude futures fell 2.4% to around $ 116 a barrel, while US WTI trading fell 2.7% to $ 109 a barrel.
Authorities in Shanghai announced on Sunday that they would close the country’s financial hub in two stages to carry out a large-scale Covid-19 test within nine days.
Public transportation, including ride-hailing services will be suspended during the ban. Unapproved vehicles are also not allowed to be on the road.
In addition to that, all companies and factories will suspend manufacturing and encourage working from home.
The black commodity had risen higher in weekend trading after reports of a Yemeni Houthis attack on Saudi Arabia’s energy facility on Friday sparked concerns over world supply constraints.
The attack has caused fires in two storage tanks but no casualties have been reported.
