© Reuters. FILE PHOTO: A gas pump is seen hanging from the ceiling at a petrol station in Seoul June 27, 2011. REUTERS/Jo Yong-Hak/File Photo
By Scott DiSavino
NEW YORK (Reuters) -Oil prices fell about 3% 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 have razed homes and forests and parts of Europe suffered deadly floods last month.
futures fell $1.84, or 2.6%, to $68.86 a barrel by 11:22 a.m. EDT (1522 GMT), while U.S. West Texas Intermediate (WTI) crude fell $1.88, or 2.8%, to $66.40.
That put both benchmarks down about 10% over the past 10 sessions.
WTI traded at its lowest intraday since May and was on track for its lowest close since May 28. Brent, meanwhile, was on track for its lowest close since July 19.
“Oil prices are under considerable pressure … with COVID concerns once again being front and centre,” said Craig Erlam, senior analyst at OANDA, noting “Rising Chinese Delta cases and restrictions has cast doubt over the economy in the short-term.Wall Street banks Goldman Sachs (NYSE:), JPMorgan (NYSE:) and Morgan Stanley (NYSE:) 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 imports fell in July and were down sharply from the record levels of June 2020.
A rally in the U.S. dollar to a near 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 U.S. monetary policy.
A stronger U.S. dollar makes oil more expensive for holders of other currencies.
Market focus was on a number of U.S. Federal Reserve policymakers due to speak 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 109.2 billion riyals reported in the same quarter a year ago.
Saudi Aramco (SE:) reported a near 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.
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