Oil prices dip on stronger dollar & new Covid-19 curbs in China

Global crude prices dropped nearly 2%, hitting more than two-week lows, amid rising concerns over new pandemic-related restrictions in China and a strengthening US dollar.

Brent crude futures for October delivery fell $2.25% to $69.11 per barrel by 06:58 GMT, after having dropped 6% last week, the biggest weekly loss in four months.

Meanwhile, US crude benchmark WTI declined by 2.3%, to $66.71 per barrel, following a 7% slump last week, the steepest weekly decline in nine months.

The drop reportedly comes amid new restrictions introduced by China, one of the world’s major oil consumers, due to rising Covid-19 cases.

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“Concerns about potential global oil demand erosion have resurfaced with the acceleration of the Delta variant infection rate,” RBC analyst Gordon Ramsay told Reuters.

Moreover, the latest rally in the US dollar weighed on oil prices as well, as a stronger greenback makes oil more expensive for holders of other currencies.

The dollar hit a four-month high against the euro on a stronger-than-expected US jobs report published on Friday, which revived hopes that the Federal Reserve would move to tighten US monetary policy more quickly.

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