Oil futures ended lower Monday, extending last week’s tumble as China took additional steps to limit the spread of the delta variant of the coronavirus that causes COVID-19, underlining fears about global crude demand.

“Market participants are watching the rising coronavirus figures in Asia with considerable alarm, as this could prompt the Chinese government to take drastic measures in line with its strict zero covid strategy, despite numbers there still being at a low level,” said Carsten Fritsch, commodity analyst at Commerzbank, in a note.

China, the world’s largest crude importer, has already ramped up efforts to contain the virus. Health authorities in Beijing last week canceled all large-scale exhibitions and events for August. The country has also reimposed travel restrictions, including flight cancellations and warnings by dozens of cities against travel and limits on travel by taxi and other transportation, according to news reports.

West Texas Intermediate crude for September delivery
CL00,
-2.09%

CLU21,
-2.09%

fell $1.80, or 2.6%, finishing at $66.48 a barrel on the New York Mercantile Exchange. October Brent crude
BRN00,
+0.36%

BRNV21,
+0.36%
,
the global benchmark, dropped $1.66, or 2.4%, to settle at $69.04 a barrel on ICE Futures Europe. Crude dropped more than 4% before trimming losses, with both benchmarks ending the day at the lowest for a front-month contract since July 19.

Customs data out of China also contributed to the weakness, Fritsch said, showing July crude imports of 9.7 million barrels a day, roughly in line with June and remaining below 10 million barrels a day for a fourth consecutive month.

Meanwhile, Goldman Sachs cut its 2021 China growth forecast as a result of the efforts to contain the spread of the delta variant, though the bank expects a rebound later in the year.

The gasoline crack spread moved back into positive territory on the day, noted Robert Yawger, director of energy futures at Mizuho Securities, in a note. The crack spread refers to the differential between the price of a barrel of oil and the products produced from it.

As crude-oil prices teetered in the past few weeks, gasoline “has supported and served as the strongest leg of the energy market,” he said. “While crude oil was drifting lower” and threatened “to take the rest of the complex with it, gasoline stood its ground relative to crude oil, and put a bid in the market.”

September gasoline
RB00,
-0.48%

RBU21,
-0.48%

fell 1% to end at $2.2348 a gallon, while September heating oil
HO00,
-1.78%

HOU21,
-1.78%

ended at $2.0421 a gallon, down 2%.

September natural-gas futures
NG00,
-2.44%

NGU21,
-2.44%

fell 1.9% to $4.06 per million British thermal units.

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