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LONDON, April 25 Reuters Oil slumped nearly 5 to the lowest in almost two weeks on Monday, extending last week39;s decline as concern grew that prolonged COVID19 lockdowns in Shanghai and potential increases to U.S. interest rates would hurt global growth and oil demand.
In Shanghai, authorities have erected fences outside residential buildings, sparking fresh public outcry. In Beijing many have begun stockpiling food, fearing a similar lockdown after the emergence of a few cases.
It seems that China is the elephant in the room, said Jeffrey Halley, analyst at brokerage OANDA. The tightening COVIDzero restrictions in Shanghai, and fears Omicron has spread in Beijing, torpedoed sentiment today.
Brent crude was down 4.91, or 4.6, at 101.74 a barrel by 0931 GMT and touched 101.20 earlier in the session, the lowest since April 12. U.S. West Texas Intermediate WTI crude fell 5.00, or 4.9, to 97.07.
Shanghai shows no signs of letting up its strict zeroCOVID policy; instead vowing to step up the enforcement of COVID restrictions, which could hurt oil demand further, said City Index analyst Fiona Cincotta.
Oil also weakened on the prospect of higher U.S. interest rates, which are boosting the U.S. dollar. A strong dollar makes dollarpriced commodities more expensive for other currency…