Brent crude futures fell $1.81, or 1.48%, to $120.20 a barrel by 0443 GMT while U.S. West Texas Intermediate crude was at $118.81 a barrel, down $1.86, or 1.54%. Both contracts dropped over $2 earlier in the session.
Prices fell after Chinese officials warned on Sunday of a "ferocious" COVID-19 spread in the capital and announced plans to conduct mass testing in Beijing until Wednesday.
"China remains the significant near-term downside risk, but most view the gradual normalisation of Chinese demand as a powerful positive for oil despite the potential for lockdown noise in the coming weeks as current demand is far from reflecting normal conditions," Stephen Innes of SPI Asset Management said in a note.
Both global oil benchmarks rose more than 1% last week after data showed robust oil demand in the world's top consumer, the United States, despite inflation concerns, and on hopes that consumption in second-biggest global consumer China would rebound after lockdown measures were lifted from June 1.
Concerns about further interest rate hikes following red-hot U.S. inflation data released on Friday are also weighing on global financial markets.
The U.S. consumer price index increased a bigger-than-expected 8.6% last month, the largest year-on-year increase since December 1981, official figures showed, dashing hopes that inflation had peaked. read more
