Oil Declines by Over $2 on Beijing's Covid-19 Warning

Oil prices dropped more than $2 on Monday as a flare-up in Covid-19 cases in Beijing dashed hopes for a rapid pick-up in China's fuel demand, while worries about global inflation and sluggish economic growth further depressed the market.
Brent crude futures fell $2.3, or 1.89%, to $119.71 a barrel, while US West Texas Intermediate crude was at $118.4 a barrel, down $2.27, or 1.88%, CNBC reported.
Prices fell after Chinese officials warned on the weekend of a "ferocious" spread of Covid-19 in the capital, where mass testing is planned until Wednesday. 
"China remains the significant near-term downside risk, but most view the gradual normalization of Chinese demand as a powerful positive for oil," Stephen Innes of SPI Asset Management said in a note.
That was despite the potential for lockdown noise in coming weeks, Innes added, with demand still far from reflecting normal conditions.
Both global oil benchmarks rose more than 1% last week after data showed robust oil demand in the world's top consumer, the United States, despite inflation concerns.
Their rise was aided by hopes for a consumption rebound in second-biggest global consumer China after lockdown measures were lifted from June 1.