LONDON—Oil prices slumped on Monday as investors were concerned that aggressive U.S. interest rate hikes might weaken the global economy and fuel demand while a stronger dollar also weighed.
Brent crude futures for October settlement fell $1.60, or 1.6 percent, to $95.12 a barrel by 0900 GMT.
U.S. West Texas Intermediate (WTI) crude futures for September delivery, due to expire on Monday, were down $1.56, or 1.7 percent, at $89.21 a barrel.
The more active October contract was at $88.92, down $1.52, or 1.7 percent.
On Friday both Brent and WTI climbed for a third straight day, but fell about 1.5 percent on the week on a stronger dollar and demand concerns.
"Growing fears over a global economic slowdown are behind the fall in oil markets," said Tatsufumi Okoshi, senior economist at Nomura Securities.
"A higher U.S. dollar also prompted fresh selling," he said. A stronger dollar makes oil more expensive for buyers in other currencies.
The dollar index rose to a five-week high on Monday after Richmond Fed President Thomas Barkin said central bankers were inclined towards faster, front-loaded interest rate increases.
Investors will be paying close attention to comments by Fed Chair Jerome Powell when he addresses an annual global central banking conference in Jackson Hole, Wyoming, on Friday.
Prices also fell on worries over slowing fuel demand in China, the world's largest oil importer, in part due to a power crunch in the southwest caused by a heatwave.
In a sign of overall concern about the Chinese economy, Beijing cut its benchmark lending rate and lowered the mortgage reference by a bigger margin on Monday, adding to easing measures announced last week, to revive an economy hobbled by a property crisis and a resurgence of COVID-19 cases.
Meanwhile, the leaders of the United States, Britain, France, and Germany discussed efforts to revive the 2015 Iran nuclear deal, the White House said on Sunday, which could unleash sanctioned Iranian oil onto markets.