(Bloomberg). Oil fell after four days of gains. Investors weighed the risk of energy shortages from major Chinese centers against disruptions from Libyan crude oil supplies.

West Texas Intermediate closed at $108/barrel in Asian trading on Monday, closing at its highest in over three weeks. China is battling a renewed Covid-19 outbreak, imposing harsh curbs to try and stem the disease’s spread, hurting industrial output and mobility in the top importer.

Libya’s oil production has fallen by more than half a million barrels a day and there’s a risk of further losses as a wave of political demonstrations engulfs the OPEC member. As protests spread, the Sharara oil field, located west of Libya, that could pump 300,000 barrels per day, was closed. 

Oil has advanced more than 40% this year as Russia’s invasion of Ukraine upended an already-tight market. Inflation is being stoked by the gains in crude oil and other commodities, which has prompted central banks to tighten their policies. On Monday, Federal Reserve Bank of St. Louis President James Bullard said the U.S. central bank shouldn’t rule out rate increases of 75 basis points.

U.S. President Joe Biden ordered the evacuation of emergency stocks of millions of barrels worth of crude oil to counter rising prices. Following the move, a cargo of crude from the nation’s Strategic Petroleum Reserve departed a Texas port bound for Europe as some local refiners shun Russian supplies.  

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