Oil costs fell forcefully on Monday as new lockdowns across Europe and record Covid cases in the United States hammered the outlook for energy demand.

Brent crude, the global benchmark, fell as much as 5% in early morning trading in Asia, contacting levels last observed in May, prior to paring misfortunes to trade 2% lower at $37.13 a barrel. West Texas Intermediate, the US benchmark, was down 2.49% at $34.90 a barrel.

Decisions by European governments to force another round of serious Covid limitations is burdening assumption. France, Germany and Belgium are returning into cross country lockdowns, closing restaurants and non-essential businesses for a little while and limiting travel. In the United Kingdom, authorities are presenting a lockdown in England that is planned to go through December 2.

These four nations burn-through what might be compared to a little over 6% of global consumption, “so no surprise that we are seeing the market reacting this morning,” ING’s head of commodities methodology Warren Patterson and senior commodities strategist Wenyu Yao wrote in a research note on Monday.

Economists dread that Europe’s economy could contract in the final quarter, raising feelings of trepidation of another downturn. Notwithstanding record GDP growth in the second from last quarter, the EU economy stays about 4% more modest than it was toward the finish of September a year ago.

There are additionally stresses that governments somewhere else will be compelled to reimpose limitations heading into the Christmas season. The United States recorded 81,493 new Covid cases on Sunday, in the wake of reporting 99,321 on Friday, the highest single day number of cases for any nation, as indicated by Johns Hopkins University. The US death toll from Covid-19 currently remains at more than 230,995, the highest number of fatalities around the world.

“Fresh worries that politicians worldwide will be pressured to lock down Christmas this year is hitting the oil markets like a ton of bricks,” Stephen Innes, chief global markets strategist at Axi said in a research note. “The alarmingly high level of angst in the markets makes it easy for the oil roller coaster to crest rally peaks and head downhill at alarmingly quick speeds,” he added.