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Brent crude futures for January had slipped 51 cents, or 0.6%,
to $87.11 a barrel by 1205 GMT.
U.S. West Texas Intermediate (WTI) crude futures for December
were at $79.86 a barrel, down 22 cents or 0.3%, ahead of the
contract's expiry later on Monday. The more active January
contract was down 42 cents or 0.5% to $79.69 a barrel.
Both benchmarks closed Friday at their lowest since Sept. 27,
extending losses for a second week, with Brent down 9% and WTI
10% lower.
"Apart from the weakened demand outlook due to China's COVID
curbs, a rebound in the U.S. dollar today is also a bearish
factor for oil prices," said CMC Markets analyst Tina Teng.
"Risk sentiment becomes fragile as all the recent major
countries' economic data point to a recessionary scenario,
especially in the UK and euro zone," she said, adding that
hawkish comments from the U.S. Federal Reserve last week also
sparked concerns over the U.S. economic outlook.
New COVID case numbers in China remained close to April peaks as
the country battles outbreaks nationwide and in major cities.
Schools in some districts in the capital Beijing switched to
online classes on Monday after officials asked residents to stay
home, while the southern city of Guangzhou ordered a five-day
lockdown for its most populous district.
"The prospect of more restrictions and therefore lower demand in
China has weighed on crude prices recently," said Craig Erlam,
senior market analyst at OANDA.
"We're seeing bleak economic prospects all around the globe
which continues to weigh on oil prices and if interest rates
keep rising as they are, expectations will likely deteriorate
further."
The front-month Brent crude futures spread narrowed sharply last
week while WTI flipped into contango, reflecting dwindling
supply concerns.
Meanwhile expectations of further interest rate rises elsewhere
have elevated the greenback, making dollar-denominated
commodities more expensive for investors.
(Additional by Florence Tan and Emily Chow; editing by Kenneth
Maxwell and Jason Neely)
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