Oil prices fall to two-month low amid new coronavirus cases in China and dollar rally.
China's stronger US dollar and lower fuel demand have lowered oil prices.
Oil prices fell to their lowest in two months on Monday after a spike in coronavirus cases in China and a boost to the US dollar.
According to Reuters, the forecast for Brent crude for January was down 0.6%, or 52 cents, at $87.10 by 1:26 pm. GMT. Moreover, US West Texas Intermediate (WTI) estimated December futures at $79.30 a barrel, down 0.9%, or 68 cents.
Meanwhile, January West Texas Intermediate crude futures fell 43 cents to 79.68 a barrel, another drop of 43 cents, or nearly 0.5%. Overall, both reference prices ended the week at their lowest point since September, with Brent crude down 9% and WTI down 10%.
The lower prices came as China grapples with new cases of COVID-19 that have caused nationwide outbreaks across major cities and some schools to return to online classes. City officials in Guangzhou ordered the closure of the large metropolitan area for about a week.
"The possibility of further restrictions and therefore lower demand in China has weighed on crude prices recently," Craig Erlam, chief market analyst at Oanda, told Reuters in a statement.
"We are seeing bleak economic prospects around the world that continues to weigh on oil prices, and if interest rates continue to rise as they are, the outlook is likely to deteriorate further."
The US dollar also strengthened amid the continued rise in interest rates expected, which led to higher prices of dollar-denominated commodities.
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