Oil collapses on China travel restrictions and strong US dollar

MELBOURNE, Aug.9 (Reuters) – Oil prices fell 2% on Monday, extending last week’s steep losses amid a rising US dollar and fears that further pandemic restrictions in Asia, especially China , slow down the global recovery in fuel demand.

Brent crude futures slipped $ 1.41, or 2%, to $ 69.29 a barrel at 1:25 a.m. GMT, after falling 6% last week, their biggest weekly loss in four months.

US West Texas Intermediate (WTI) crude futures fell $ 1.32, or 1.9%, to $ 66.96 a barrel, after falling nearly 7% last week when they were traded. largest weekly drop in nine months.

“Concerns about the potential erosion of global oil demand have resurfaced with the acceleration in the rate of Delta variant infection,” 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.

“Although the number of cases (in China) is low, it comes just as the summer travel season is peaking,” ANZ commodity analysts said in a note. “It overshadowed signs of strong demand elsewhere.”

In Malaysia and Thailand, infections continue to hit daily records of over 20,000. Read more

Oil also fell as the US dollar hit a four-month high against the euro after the stronger-than-expected US jobs report on Friday prompted betting that 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.

Reporting by Sonali Paul; Editing by Clarence Fernandez

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