Oil Drops on China Covid Woes

Oil prices fell on Monday in volatile trade, reversing some gains from the previous session, as markets braced for new mass Covid testing in China potentially hitting demand, a worry that outweighed ongoing concerns about tight supply.
Brent crude futures fell $1.02, or 1%, to $106.00, after climbing 2.3% on Friday, CNBC reported.
US West Texas Intermediate crude futures declined by $1.38, or 1.3%, to $103.41, paring a 2% gain from Friday.
Trading was thinned by a public holiday in parts of Southeast Asia, including oil trading hub Singapore.
The market was rattled by news that China had discovered its first case of a highly transmissible Omicron subvariant in Shanghai and that new cases had jumped to 63 in the country's largest city from 52 a day earlier.  
"The market's just responding to news flow and China has grabbed the most attention so far," said Commonwealth Bank commodities analyst, Vivek Dhar.
Traders were nervous that the discovery of the new subvariant and the highest number of daily new cases in Shanghai since May could lead to another round of mass testing, which would hurt fuel demand, he added.
Both benchmark crude contracts traded lower in early trade on Monday, turned positive and turned back down again after the latest Covid news from China.