Oil prices fell on Monday, dragged down by a firmer US dollar while surging coronavirus cases in China dashed hopes of a swift reopening of the economy for the world’s biggest crude importer.
Brent crude futures were down 76 cents, or 0.8%, at $95.23 a barrel by 1510 GMT after gaining 1.1% on Friday. WTI crude futures fell 93 cents, or 1.1%, to $88.03 after advancing 2.9% on Friday.
“US dollar strength appears to be weighing on oil and the broader commodities complex this afternoon,” said Warren Patterson, head of commodities strategy at ING.
“There probably is also an element where the market got a bit ahead of itself on Friday following an easing in China’s COVID-related quarantine measures.” Commodities prices rallied on Friday after China’s National Health Commission adjusted its COVID prevention and control measures to shorten quarantine times for close contacts of cases and inbound travellers.
But COVID-19 cases climbed in China over the weekend, with Beijing and other big cities on Monday reporting record infections.
The Organization of the Petroleum Exporting Countries (OPEC), meanwhile, cut its forecast for global oil demand growth this year and next, citing economic headwinds.
Separately, US Treasury Secretary Janet Yellen on Friday said that India can continue buying as much Russian oil as it wants, including at prices above a G7-imposed price cap mechanism, if it steers clear of Western insurance, finance and maritime services bound by the cap.