Oil slid to a three-week low with new waves of Covid-19 exacerbating demand concerns as investors weighed concerns about a pullback in stimulus.

Futures in New York ended the day down by more than 2.6%. Federal Reserve Bank of Atlanta President Raphael Bostic said the central bank should move to taper asset purchases after another strong month or two of employment gains. At the same time, Chinese air travel dropped the most since early in the pandemic as rising cases of the delta variant spurred fresh restrictions on movement. “Chinese mobility on roads and air traffic is down, so what traders are wondering now is whether or not other large oil consuming and producing regions will start to see a China-like demobilization,” said Vikas Dwivedi, Oil & Gas Economist at Macquarie Capital. “We could see this domino effect, where other regions follow China’s lead and that would lead to lower oil demand for the remainder of this year and beyond.”

Crude has run into stiff headwinds this month as the delta variant sweeps across the globe, leading to renewed restrictions. In China, airline seat capacity has dropped 32% in a week, the most since early in the pandemic, while air-travel comebacks have stagnated in Europe and North America.

Investors are also watching a pending decision from the European Union, representatives of which are currently discussing whether or not to reverse the current policy that allows Americans into the block. A decision in the negative would “negate what could have been a better future demand profile,” Dwivedi added.

Delta is also impacting the oil market structure. The prompt time spread for Brent has narrowed to 43 cents a barrel in backwardation — a bullish signal where near-dated contracts are more expensive than later-dated ones. That compares with 69 cents a week earlier.

Crude’s plunge on Monday coincided with a broader commodities selloff, with gold earlier touching the lowest since March and copper slipping to a two-week low. “A lot of other outside markets are being liquidated,” said Phil Streible, chief market strategist at Blue Line Futures. “You’re seeing pressure come back on gold and silver, at the same time that the dollar index has turned positive.”