Brent gives up two-month high on Chinese demand

Oil prices fell in European trade with US crude backing off three-week high while Brent declined from two-month peak on active profit-taking and amid concerns about demand in China, the world's second largest oil consumer. 

Losses were contained by dollar's tumble against a basket of major rivals, in turn making dollar-denominated commodities cheaper to holders of other currencies.

Global Prices

US crude fell 2.1% to $90.45 a barrel, while Brent shed over 1.9% to $96.65 a barrel, after US crude rose 5.2% on Friday, marking three-week highs at $92.83, while Brent added 4.3% back then, hitting late August highs at $98.76.

Oil prices rallied 4.75% last week, the second weekly profit in a row amid concerns about supply shortages in the US while OPEC+ production cuts get into place. 

Chinese Demand

China asserted its commitment to a zero Covid 19 tolerance policy as infections hit six-month high, in turn hurting demand forecasts for oil.

The Dollar

The dollar index fell 0.4% to 110.34, the lowest since October 28, with a session-high at 112.27.

The dollar index closed Friday down 1.9%, the first loss in three days, and the largest since December 2015.

It's the largest loss in seven years, and came after highly bearish remarks from several Federal Reserve officials on interest rates at the December meeting.