London — Oil dropped about $2 a barrel on Monday as a flare-up in Covid-19 cases in Beijing dented hopes of a Chinese demand rebound, while worries about more interest rate hikes to control rampant inflation added further pressure.
Brent crude was down $1.86, or 1.5%, to $120.15 at 9.07 GMT, while US West Texas Intermediate crude was down $2.15, or 1.8%, at $118.52. Concern about further rate hikes, heightened by Friday’s US inflation data showing the US consumer price index rose 8.6% last month, also pushed oil lower and weighed across financial markets.
Oil has surged in 2022 as Russia’s invasion of Ukraine compounded supply concerns and as oil demand recovered from Covid-19 lockdowns. Brent hit $139, the highest since 2008, in March, and both oil benchmarks rose more than 1% last week.