US crude tumbled 7.9% and Brent lost 7% on the Covid news, giving back most of last week's big gains. The heavy selloff comes after officials in China announced plans to lock down half of Shanghai for mass Covid-19 testing beginning Monday. "China is the big fear factor right now," said Michael Tran, managing director of global energy strategy at RBC Capital Markets.
Shanghai, a city of about 25 million and a major hub of the Chinese economy, is set to have roughly half of its population banned from going out for four days starting Monday. The lockdown will then move to the other half of Shanghai. "The magnitude of the selloff reflects fears that Covid lockdowns in China could spread," Andy Lipow, president of Lipow Oil Associates, wrote in a report Monday.
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