Oil dragged down by firmer dollar, China’s COVID news

Oil prices settled around $3 lower on Monday, dragged down by the stronger dollar while surging coronavirus cases in China dashed hopes of a swift reopening of the economy for the world’s biggest crude importer.

Brent crude futures settled down $2.85, or 3%, at $93.14 a barrel after gaining 1.1% on Friday. WTI crude futures settled down $3.09, or 3.47%, to $85.87 after advancing 2.9% on Friday.

On Friday, commodities prices rallied after China’s National Health Commission adjusted its COVID prevention and control measures to shorten quarantine times for close contacts of cases and inbound travellers.

But COVID-19 cases climbed in China over the weekend, with Beijing and other big cities on Monday reporting record infections. The surge in COVID cases will only lead to more lockdowns in the near term. For now China is not a source of bullish support for the petroleum complex.