Oil prices dropped to $104 a barrel amid oversupply fears triggered by dwindled industrial activities in China, the world’s top oil importer.
On Monday, Brent crude futures fell 2.72 per cent to $104.2 a barrel at 10:38 GMT + 1, while West Texas Intermediate (WTI) crude futures fell 3.04 per cent to $101.5 a barrel.
The price collapse surfaced after China released data showing that factory activity in the East Asian country declined for a second month to its lowest since February 2020 amid COVID-19 lockdowns in Shanghai.
The official manufacturing purchasing managers’ index (PMI) fell to 47.4 in April from 49.5 in March in a second straight month of contraction, China’s National Bureau of Statistics (NBS) said in a report on Saturday.
“A slowing to that extent, when China is already suffering from a property bust, and worries about its (until recently) increased regulation, is potentially a major issue for commodity markets and the world economy,” Tobin Gorey, a Commonwealth Bank commodities analyst, told Reuters in a note.