Oil prices extend losses as Shanghai lockdowns hit demand outlook

Oil prices extend losses as Shanghai lockdowns hit demand outlook

TOKYO: Oil prices extended losses on Monday amid persistent worries that prolonged COVID-19 lockdowns in Shanghai and potential U.S. rate hikes would dent global economic growth and fuel demand.

Brent crude futures slid $1.90, or 1.8%, to $104.75 a barrel at 0015 GMT, while U.S. West Texas Intermediate (WTI) crude futures fell $1.89, or 1.9%, to $100.18 a barrel.

The benchmarks lost nearly 5% last week on demand concerns.

"Bearish sentiment outweighed concerns over tight global supply as China continued lockdowns in Shanghai and investors prepared for a series of U.S. rate hikes," said Hiroyuki Kikukawa, general manager of research at Nissan Securities.

Investors are trying to adjust their positions before the U.S. summer driving season kicks off later in May, he said.

"But oil prices are not expected to fall below $90 a barrel due to the prospect of a potential ban by European Union on Russian oil amid a deepening Ukraine crisis," he said.

Shanghai authorities battling an outbreak of COVID-19 have erected fences outside residential buildings, sparking fresh public outcry over a lockdown that has forced much of the city's 25 million people indoors.

The U.S. Federal Reserve Chairman Jerome Powell has indicated that a half-point interest rate increase "will be on the table"