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Beijing, reporting dozens of new cases daily, is mass-testing
residents to avert a lockdown similar to Shanghai's over the
past month. The capital's restaurants were closed for dining in,
and some apartment blocks were sealed shut.
Brent crude was down $1.30, or 1.2%, at $106.28 a barrel at 0942
GMT. U.S. West Texas Intermediate (WTI) crude dropped 90 cents,
or 0.9%, to $104.27.
"The positive driver has been the EU embargo and whether that
will be announced," said Commonwealth Bank commodities analyst
Vivek Dhar.
"Your negative driver is Chinese COVID lockdowns. They're both
very important thematics."
Oil has hit multi-year highs this year, with Brent reaching $139
in March, the highest since 2008, after Moscow's invasion of
Ukraine exacerbated supply concerns that were already fuelling a
rally.
The increasing prospect of EU sanctions on Russia lent support.
The European Commission is expected to finalise on Tuesday work
on the next package of EU sanctions against Russia, which would
include a ban on buying Russian oil.
"A potential EU-wide oil embargo could significantly undermine
the already diminishing availability of Russian barrels," said
Tamas Varga of oil broker PVM.
Also in focus will be the latest round of U.S. inventory and
supply reports. Five analysts polled by Reuters on average
expect U.S. crude inventories fell by 1.2 million barrels in the
week to April 29. [EIA/S]
The American Petroleum Institute industry group issues its
inventory report at 2030 GMT, followed by government figures
from the Energy Information Administration on Wednesday.
(Additional reporting by Sonali Paul; Editing by Jan Harvey and
Louise Heavens)
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