Paul Putnam, 53, a self-employed rancher and firefighter walks past a pump jack in Loving County, Texas, November 25, 2019.
Biting Angus | Reuters
Oil prices fell nearly 2% on Monday, extending the steep losses of last week on the rise in the US dollar and fears that further pandemics in Asia, especially China, could dampen the global recovery of fuel demand.
Brent crude futures fell $ 1.27, or 1.8%, to $ 69.43 a barrel at 4:34 a.m. GMT, after falling 6% last week, their biggest weekly loss in four month.
US West Texas Intermediate (WTI) crude futures fell $ 1.29, or 1.9%, to $ 66.99 a barrel, after falling nearly 7% last week when they were traded. largest weekly drop in nine months.
âConcerns about the potential erosion of global oil demand have resurfaced with the acceleration in the rate of Delta variant infection,â RBC analyst Gordon Ramsay said in a note.
ANZ analysts pointed out that the new restrictions in China, the world’s second largest consumer of oil, were a major factor clouding the outlook for demand growth.
The restrictions include flight cancellations, warnings from 46 cities against travel, and limits on public transport and taxi services in 144 of the worst-affected areas.
China reported 125 new cases of Covid-19 on Monday, up from 96 a day earlier.
In Malaysia and Thailand, infections continue to hit daily records of over 20,000.
âAlthough the number of cases (in China) is low, it comes just as the summer travel season is peaking,â ANZ commodity analysts said in a note. “It overshadowed signs of strong demand elsewhere.”
China’s crude oil imports edged down daily in July to 9.71 million barrels per day (bpd), a fourth consecutive month of imports below 10 million bpd and down sharply from a record high. 12.94 million bpd in June 2020 when refiners stockpiled on cheap crude, data showed on Saturday showed.
China’s export growth slowed more than expected in July following outbreaks of Covid-19 cases and flooding, while import growth was also weaker than expected, indicating a slowdown in the sector industrialist in the second half of the year.
A rally in the US dollar to a four-month high against the euro also weighed on oil prices, after the stronger-than-expected US jobs report on Friday prompted bets the Federal Reserve could act more quickly to tighten US monetary policy.
A stronger US dollar makes oil more expensive for holders of other currencies.
Trade was calm with vacations in Japan and Singapore.