Oil prices fell on Monday, ending three days of gains, on fears aggressive U.S. interest rate hikes may lead to a global economic slowdown and dent fuel demand. Brent crude futures for October settlement declined $1.17, or 1.2%, to $95.55 a barrel by 0054 GMT, with concerns over slowing demand in China because of a power crunch in some areas also weighing on prices. U.S. West Texas Intermediate (WTI) crude futures for September delivery, due to expire on Monday, was down $1.12, or 1.2%, at $89.65 a barrel.
The more active October contract was at $89.29, down $1.15, or 1.3%. Both Brent and WTI climbed for a third straight day on Friday, but fell about 1.5% for the week on a stronger dollar and demand fears.
“Investors were worried that a possible steep rate hike by the Fed would cause an economic slowdown and sap fuel demand,” said Hiroyuki Kikukawa, general manager of research at Nissan Securities.
“China’s power restriction in some regions is also a concern as it could affect economic activity,” he added. China’s southwestern province Sichuan began limiting electricity supply to homes, offices and malls last week because of a severe power crunch driven by extreme heat waves and drought, according to state media and one power company.
