The price of oil and other key industrial commodities slid Monday after Chinese government measures to halt the spread of the Delta variant spooked investors about global energy demand.
Brent crude oil, the global benchmark, fell 4% to $67.87 a barrel and West Texas Intermediate futures—the main U.S. benchmark—were down 4.3% at $65.38 a barrel. At those prices, both gauges were set for their lowest close in around 2½ months.
The spread of Delta variant Covid-19 cases has raised alarms in China and other East Asian countries. Beijing health authorities said last week that the city would cancel all large-scale exhibitions and events for the remainder of August.
China is the world’s biggest importer of oil and “while some countries seem to be flipping to 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 published over the weekend show that China imported less crude per day in July than in June and those figures were also weighing on prices, according to analysts at Dutch bank ING.