(C) Reuters. FILE PHOTO: Oil tankers are seen at a terminal of Sinopec Yaogang oil depot in Nantong, Jiangsu province, China June 11, 2019. Picture taken June 11, 2019. REUTERS/Stringer/File Photo
By Scott DiSavino
NEW YORK (Reuters) -Oil prices fell more than 2% on Monday, extending last week’s steep losses on the back of a rising U.S. dollar and concerns that new coronavirus-related restrictions in Asia, especially China, could slow a global recovery in fuel demand.
A United Nations panel’s dire warning on climate change added to the gloomy mood after fires in Greece razed homes and forests and parts of Europe suffered deadly floods last month.
Brent futures were down $1.65, or 2.3%, to $69.05 a barrel by 1:21 p.m. EDT (1721 GMT), while U.S. West Texas Intermediate (WTI) crude fell $1.73, or 2.5%, to $66.55.
That put both benchmarks down more than 9% over the past six sessions and on track for their lowest closes since July 19.
In intraday trade, WTI fell to its lowest level since May.
“Oil prices are under considerable pressure … with COVID concerns once again being front and centre,” said Craig Erlam, senior analyst at OANDA. “Rising Chinese Delta cases and restrictions has cast doubt over the economy in the short-term.”Wall Street banks Goldman Sachs (NYSE:GS), JPMorgan (NYSE:JPM) and Morgan Stanley (NYSE:MS) all cut their China growth forecasts on Monday, after export growth slowed unexpectedly and on concerns that the resurgent coronavirus could crimp economic activity.
China reported 125 new COVID-19 cases on Monday, up from 96 a day earlier. In Malaysia and Thailand, infections hit daily records.
China’s export growth slowed more than expected in July after outbreaks of COVID-19 cases and floods, while import growth was also weaker than expected.
China’s crude oil imports fell in July and were down sharply from the record levels of June 2020.
A rally in the U.S. dollar, which hit nearly a three-week high against a basket of other currencies, also weighed on oil prices after Friday’s stronger-than-expected U.S. jobs report spurred bets that the Federal Reserve could move more quickly to tighten monetary policy.
A stronger U.S. dollar makes oil more expensive for holders of other currencies.
Investors were focused on a number of Fed policymakers speaking on Monday and U.S. inflation data due on Wednesday which will be watched for further clues of when the Fed might start tapering.
Saudi Arabia, meanwhile, posted a deficit of 4.6 billion riyals ($1.23 billion) in the second quarter, a huge drop from the 109.2 billion riyals reported in the same quarter a year ago.
Saudi Aramco (SE:2222) reported nearly a four-fold rise in second-quarter net profit on Sunday, and said it was scouting for other potential deals to offer to investors and unlock capital after the oil giant in June closed a $12.4 billion deal for its crude pipeline network.
Oil slides more than 2% on China’s virus curbs, strong dollar
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