FX.co ★ Oil Extends Losses On China Demand Concerns

Oil prices fell further on Monday to extend steep losses from last week on demand worries.

Benchmark Brent crude futures dropped 0.8 percent to $86.94 a barrel, while WTI crude futures were down 0.7 percent at $79.53.

WTI crude futures plummeted around 10 percent last week to reach six-week lows while Brent prices fell almost 9 percent on China demand worries and fears of more aggressive interest-rate hikes in the United States.

The prospect of more restrictions and therefore lower demand in China weighed on oil prices today after China reported the first virus-related deaths recorded since May this year.

Goldman Sachs cut its forecast for Brent oil by $10 to $100 per barrel for the fourth quarter of 2022, citing rising COVID cases in China and increased flows of oil from Russia ahead of EU curbs and the price cap.

A stronger dollar also weighed on oil prices following hawkish remarks from several Fed officials last week.

Markets currently expect a 50-bps hike at the Fed's December meeting, then by quarter points the following two meetings.