Singapore October 11 2022: Oil prices fell on Tuesday, extending nearly 2% losses in the previous session, as a stronger U.S. dollar and a flare-up in COVID-19 cases in China increased fears of slowing global demand.
Brent crude futures fell 57 cents, or 0.6%, to $95.62 a barrel by 0031 GMT, after falling $1.73 in the previous session.
U.S. West Texas Intermediate crude was at $90.58 a barrel, down 55 cents, or 0.6%, after losing $1.51 in the previous session.
The U.S. dollar rose for a fourth straight session on Monday as investors braced for high inflation data released this week, leading to expectations of continued aggressive monetary policy from the Federal Reserve.
A strong greenback reduces demand for oil by making it more expensive for buyers using other currencies.
Rate increases to date were starting to slow the economy and the full brunt of tighter policy would not be felt for months to come, Fed Vice Chair Lael Brainard said on Monday.
“Strong jobs data has strengthened expectations of another 75 basis points rate hike at next month’s Fed meeting, leaving downside risk for global oil demand,” said ANZ Research analysts in a note.
The sustained zero COVID-19 policy in China ahead of a Communist Party congress is “not helping” demand, the analysts added.
COVID-19 cases in the world’s second-largest oil consumer rose to their highest since August. Its services activity in September contracted for the first time in four months, as pandemic restrictions weighed.
