The FTSE 100 and European stocks were in the red on Monday, as protests intensify in major Chinese cities against the country’s stringent zero-COVID rules.
Protests over strict anti-virus curbs erupted across the world's largest crude importer over the weekend, including demonstrations in Beijing and Shanghai, sparking a broad selloff in commodities as the week opened.
Naeem Alsam, chief market analyst at Avatrade, said: “Basically, it is demand that is creating the main issue for the price, and the fact that we have a potential recession threat and now the COVID issues in China, things are becoming difficult for oil traders
"The reality is that no one wants to see more lockdowns in China, as a situation like this creates nothing but more headwinds for oil prices."
The ongoing protests in China over quarantine restrictions were also affecting expectations for demand for metal. Falling metal prices hit miners Anglo American (AAL.L) and Rio Tinto (RIO.L), down 0.73% and 0.51% respectively.
Raffi Boyadjian, lead investment analyst at XM, said: "Risk assets took a knock at the start of the week as worries about instability in China and how the country’s unyielding zero-COVID policy might further blight the outlook led investors to search for safety.
"Anti-lockdown protests started spreading after a deadly fire in Xinjiang last Thursday where residents were reportedly unable to escape the residential complex due to the harsh COVID restrictions.
"But the protests erupted further over the weekend, turning into nationwide demonstrations against the government’s handling of the pandemic as anger boiled over. It is yet unclear how authorities plan to quell the ever-growing unrest given their unprecedented scale, or just how much more widespread these protests will become.
"But this is uncharted territory for president Xi Jinping and the Communist party, and it is making the markets nervous."
In Asia, Tokyo’s Nikkei 225 (^N225) slumped 0.42% to finish at 28,162 while the Hang Seng (^HSI) in Hong Kong retreated 1.29% to 17,346. The Shanghai Composite (000001.SS) tumbled 0.75% to 3,078 points.
On Wall Street, stocks closed mixed on Friday but every major index notched weekly gains in a holiday-shortened week.