Seeking AlphaSeeking Alpha

U.S. crude oil slides to lowest this year as China protests shake market

Oil and gas producers populate much of Monday's list of biggest losers in early trading, as U.S. crude prices erased their entire YTD gain.

On top of growing concerns about weaker fuel demand in China due to surging COVID-19 cases, and uncertainty stemming from the eruption of street protests over the government's strict COVID restrictions have prompted selling in equities as well as oil and other commodities.

Analysts worry that the protests could mark the start of even more strict authoritarian rule by President Xi Jinping.

U.S. WTI crude (CL1:COM) for January delivery -1.4% to $75.19/bbl after falling as far as $73.60/bbl earlier, its lowest since December 22, and January Brent crude (CO1:COM) -1.7% at $82.22/bbl after diving more than 3% to $80.61 to its lowest since January 4, after both benchmarks hit 10-month lows last week.

ETFs: (NYSEARCA:USO), (UCO), (BNO), (SCO), (DBO), (USL), (USOI), (NRGU), (NYSEARCA:XLE), (XOP), (VDE), (OIH), (CRAK), (DRIP), (GUSH)

Energy decliners are led by APA Corp. (NASDAQ:APA), -3.3% after saying it ended drilling operations at the Awari well in Suriname's Block 58 as it was "deemed noncommercial"; in August, APA abandoned the Dikkop well in Block 58 after striking water-bearing sandstones.

Other large losers on the S&P 500 include Pioneer Natural Resources (PXD) -3.2%, EOG Resources (EOG) -3.2% and Diamondback Energy (FANG) -3.2%.

Speculators have been forced to reduce bullish bets on oil from the risk of a slowdown in China and the European Union floated a price cap on Russian crude that looks set to have minimal impact on trade.

More volatility likely is ahead for crude prices, as OPEC and its allies will meet next week to determine production levels, while the European Union continues to negotiate plans for a price cap on Russian oil.