Oil prices sank $2 on Monday, pulled down by a stronger US dollar, as rising coronavirus infections in China shattered hopes of the world’s largest crude importer quickly restarting its economy.
Brent crude futures were down $2.25, or 2.5%, to $95.23 a barrel by 1700 GMT, after rising 1.1% the day before. After rising 2.9% on Friday, WTI crude futures slipped $2.25, or 2%, to $88.03.
Commodity prices rose on Friday after China’s National Health Commission revised its Covid prevention and control measures to reduce quarantine timeframes for cases’ close contacts and arriving visitors. However, Covid-19 instances increased in China over the weekend, with Beijing and other major cities registering record infections on Monday.
On Monday, the US dollar climbed versus the euro and the yen as investors watched probable future US Federal Reserve interest rate increases after a policymaker claimed last week’s lower US inflation statistics were being overstated.
A rising dollar raises the price of dollar-denominated goods for owners of other currencies, putting pressure on oil and other risk assets.