Oil falls on expected decline in demand in China

The cost of oil continues to decline on Monday, breaking down the level of $100 per barrel. Prices are under pressure from the prospect of falling demand for oil in China.

The current quote for Brent oil is $99.56 per barrel, North American WTI oil is trading near $94.62 - and this is still a daily low.

Investors are assessing the consequences of another quarantine measures in China, designed to overcome a new outbreak of coronavirus in the country. In Shanghai, which has been in a strict lockdown since the end of March, the situation is already extremely difficult. Local media are calling the lockdown of China's leading financial center the biggest test of President Xi Jinping's anti-virus policy. The country currently has restrictions on movement, mass collection of tests and centralized quarantine.

Previously, only certain areas were quarantined, but the current approach of the authorities is unprecedented and «requires great loss of life.» Analysts believe that oil prices could fall another 3-5% if such restrictive measures are not stopped.

In addition, the price of oil is also affected by the strengthening of the dollar, which is growing today against other major currencies (the dollar index rose today to 99.91 points).