“The China data was ugly, which will have oil bears out on the prowl,” said Stephen Innes, managing partner at SPI Asset Management Pte. Low liquidity is also compounding the volatility seen in the market, he added.

The market has been gripped by a tumultuous period of trading since Russia’s late-February invasion of Ukraine and the Covid-19 resurgence in China. The war has boosted the cost of food and fuels, with surging US retail petrol and diesel prices helping fan the fastest inflation in decades.

While the Chinese data for April highlighted the impact of lockdowns, Shanghai may be nearing some relief. The city reported a second day of no Covid-19 cases outside quarantine, putting it on the brink of meeting the three days of zero community transmission that officials have said is required to start easing a punishing six-week lockdown.

European Union foreign ministers meet in Brussels on Monday to discuss the next round of Russian sanctions and diplomats have floated the idea of delaying a proposed ban on its oil imports after objections from Hungary. Germany plans to stop importing Russian oil by the end of the year even if the EU fails to agree on co-ordinated action, according to government officials.

The global fuels market has tightened as many buyers shun Russian imports due to its war in Ukraine. Rising US gasoline futures tend to trickle through to the pump quickly, signaling more pain for drivers when the summer driving season starts at the end of this month.

“Everything from gas to agriculture to oil is facing shortages because of Russia, driving up prices,” said Gao Jian, an analyst at Zhaojin Futures Co. “The market is still dominated by supply risks.” BM