Oil prices falls to two-month low amid new COVID cases in China and a strengthened dollar
A strengthened US dollar and lower demands for fuel in China are causing the oil price decline
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Oil prices fell to the lowest point in two months on Monday, following rising COVID-19 cases in China and the strengthening of the U.S. dollar.
Brent crude forecasts for the month of January fell by 0.6%, or 52 cents, to $87.10 by 1:26 p.m. GMT, according to Reuters. Moreover, the U.S. West Texas Intermediate (WTI) estimated that futures for December stood at $79.30 per barrel, a decline of 0.9% or 68 cents.
Meanwhile, WTI's January futures fell by 43 cents to 79.68 a barrel, another decline of 43 cents or approximately 0.5%. Overall, both reference prices ended the week at their lowest points since September, as Brent declined by 9%, and WTI fell by 10%.
The low prices came as China wrestled with new cases of COVID-19 that have caused nationwide outbreaks across major cities, as well as some schools to revert to online classes. City officials in Guangzhou ordered a nearly week-long lockdown in the large metropolitan area.
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Oil prices fell on Monday to the lowest point since late September. (iStock / iStock)
"The prospect of more restrictions and therefore lower demand in China has weighed on crude prices recently," Craig Erlam, senior market analyst at OANDA, told Reuters in a statement.
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"We're seeing bleak economic prospects all around the globe which continues to weigh on oil prices and if interest rates keep rising as they are, expectations will likely deteriorate further."
The U.S. dollar has also strengthened amid anticipated continued interest rate rises in the future, resulting in higher prices for commodities denominated by the dollar.
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