Oil price slides after Shanghai starts lockdown

Global oil prices fell more than $3 on Monday as fears over weaker fuel demand as China starts to implement a city-wide lockdown in Shanghai_ an important financial and manufacturing hub.

The Shanghai Composite stock index fell in early trade before regaining most of the losses later in the morning.

The lockdown_ which began on Monday_ is China's largest since the Covid-19 pandemic began more than two years ago.

Until now_ Chinese authorities had resisted locking down the city of about 25 million people to keep the world's second largest economy stable.

The city will be locked down in two stages over nine days_ in the meantime authorities will continue Covid-19 testing.

The key financial centre has battled a new wave of Covid infections for nearly a month_ although case numbers are not so much high comaparing other countries.

During lockdown_ Shanghai's public transport has been suspended_ and firms and factories in the city have been ordered to work remotely or halt.

From Friday_ the western side of Shanghai is scheduled to go into lockdown. That means half of the city will remain open.

The futures contract for Brent crude - an international benchmark for oil prices - was down by 2.8% at $117.30 in late morning trade_ $3 down than previous session.

Meanwhile_ the Shanghai Composite stock index opened lower on Monday before rebounding to trade down by just 0.13% at lunchtime.

Some businesses had already halted operating in Shanghai_ which has been battling a new wave of Covid infections for nearly a month.