Brent crude falls below $100 as China lockdowns stoke demand concerns.

On Monday, oil prices dropped to their lowest point since February, continuing a two-week slide due to demand concerns caused by lockdowns in China.

The international benchmark fell 4.18% to end the session at $98.48 per barrel, marking the first settle below $100 since March 16. The contract traded as low as $92.93 during the session, a price not seen since Feb. 25.

The impact on oil markets could be substantial if the spread of Covid results in significant lockdowns throughout China, according to Andy Lipow, president at Lipow Oil Associates.

According to Lipow, roughly 4% of China's crude is consumed in the Shanghai area, making China the world's largest oil importer.

The potential impact on demand is due to the focus on the supply side, with Russia's role as a major oil and gas producer and exporter being highlighted.

The International Energy Agency and the U.S. announced last week that they would release a combined total of 240 million barrels from emergency stockpiles and the Strategic Petroleum Reserve, respectively, to address soaring oil prices.

Last week, WTI dropped 1% and Brent fell 1.5%, marking their fourth consecutive negative week out of the past five.

Since Russia invaded Ukraine, oil prices have experienced significant fluctuations. WTI reached a high of $130.50 on March 7, the highest level since July 2008. However, the contract has since fallen by nearly 30%. Meanwhile, Brent spiked to $139.13 in March.

The IEA previously predicted that three million barrels per day of Russian oil output was at risk, which contributed to fears over what a disruption in Russian supply would mean for an already tight market.

Non-energy market participants were also reported by traders as contributing to oil's price fluctuations through contract exchanges as a hedge against inflation, among other reasons.

Wall Street firms noted that while tapping emergency oil stockpiles may temporarily ease the price increase, it does not address the underlying problems in the market.

The emergency releases of Russian crude should ease some of the market tightness caused by self-sanctioning buyers, either due to fear of future sanctions or reputational concerns, according to UBS.

The firm stated that although the action may temporarily address the oil market's imbalance, it will not resolve the structural issues caused by years of underinvestment during a time of increasing global demand.