Crude markets started the week on a feeble note following the second straight weekly decline, pressured by China lockdowns and weighed by a surplus boost after announced plans to release a record volume of crude and oil products from strategic stocks.
While for several weeks, benchmark crude futures have gone through wild gyrations, the most since June 2020, global oil markets were down for the second straight week.
Early on Monday, the benchmark Brent crude fell over $2 to $100.40 a barrel and US crude lost over 2.5 per cent to $95.82. Last week, Brent had dropped 1.5 per cent, and US West Texas Intermediate slid 1 per cent.
The world's largest importer has limited the oil market's appeal; China is battling a resurgence of COVID-19 cases, with authorities keeping Shanghai, a city of 26 million people, locked down under its "zero tolerance" for COVID-19.
In addition, International Energy Agency (IEA) member countries agreed to release 60 million barrels on top of a 180 million-barrel release announced by the US last week to help drive down prices in a tight market following Russia's invasion of Ukraine, with the US matching that amount as part of its 180 million barrel release announced in March.
"In early Asian trading, crude is trading at 2 per cent negative after the hefty release of strategic reserves by many countries and as China lockdowns continued. However, price is getting support at lower as supply concerns from Russia due to ongoing war between Russia-Ukraine and strict sanctions imposed by western countries," said Rahul Kalantri, Vice President for Commodities at Mehta Equities.
Indeed, since Russia invaded Ukraine on February 24, global crude prices have jumped, with the international benchmark Brent futures hitting a multi-decade high of nearly $140 a barrel last month.
While crude costs have eased from those highs, with benchmark futures contracts falling for a second straight week, International oil prices have remained above $100 per barrel since Moscow attacked Ukraine.