Why did Brent crude fall so sharply on Monday?

Brent had a very sharp fall of over 6% on Monday and once again fell back to the $100/bbl mark. It was largely over the slowdown concerns in China, which is expected to knock a few million barrels from the daily demand for crude oil. China is currently the world’s largest importer of crude oil. China has adopted a policy of Zero-COVID tolerance for the country.

There are growing worries that rising cases of COVID in China may translate into prolonged lockdowns and depress oil demand globally. Another factor that markets are wary that is the ultra-hawkish stance of the US Fed. They apprehend that it could destroy a good deal of purchasing power. Meanwhile, Shanghai has only stepped up its COVID restrictions policy.