Oil prices fell more than two dollars on Monday, after the increase in COVID-19 infections in the Chinese capital, Beijing, dashed hopes of a rapid increase in China's demand for oil. fuel at a time when concerns about global inflation and economic growth further depressed the market.
Brent crude futures fell 1.48%, or the equivalent of $1.81, to $119.95 a barrel, while US West Texas Intermediate crude recorded $118.81 a barrel, down 1.54%. Or the equivalent of $1.86. Both crude futures contracts also fell more than $2 earlier in the session.
Crude prices fell after Chinese officials warned on Sunday of a fierce outbreak of the Covid-19 virus in the capital and announced plans to conduct mass testing in Beijing through Wednesday.
Fears of an interest rate hike after a sharp rise in US inflation data on Friday also put pressure on global financial markets, CNBC Arabia reported.
SBI Asset Management's Stephen Innes said in a note, fears of a stronger dollar and stagflation are limiting the market's upward trend.
He added, "China still represents the big risk in the short term to the market downturn, but most view the gradual return to normal Chinese demand as a strong positive for oil, despite the fact that The hype over the possibility of a shutdown in the coming weeks because current demand does not largely reflect normal conditions.
Both world oil benchmarks rose more than 1% last week after data showed the strength of oil demand in the United States, the world's largest oil consumer, on Despite inflation fears and hope that consumption may rise in China, the second largest oil consumer in the world, after lifting the closure measures from the first of June.
