Oil prices fell on Tuesday to extend 2% losses in the previous session amid a stronger US dollar, and a rise in COVID-19 cases in China led to fears of slowing global demand. Brent crude futures demolish 57 cents, or 0.6%, to $95.62 a barrel by 0031 GMT after falling $1.73 previously. US West Texas Intermediate crude was at $90.58 a barrel, down 55 cents, losing $1.51 in the previous session.

The US dollar rose for 4th straight session on Monday as investors steadied for high inflation, leading to outlooks of continued hostile Monetary Policy from the Federal Reserve. A strong greenback diminishes demand for oil by making it more expensive for buyers using other currencies.

Media reported that the sustained zero COVID-19 policy in China amid Communist Party Congress is “not helping” demand. COVID-19 cases in the world’s second oil consumer rose to their highest since August. Thousands of cases caused by the highly infectious Omicron sub-variants BF.7 have been testified in Inner Mongolia since October, turning the country’s latest COVID-19 epicentre.

Plugging losses, the Organization of the Petroleum Exporting Countries (OPEC) and its cronies, including Russia, together known as OPEC+, in the last week decided to lower the output mark by 2 million barrels per day, raising concerns about narrowing oil supplies. EU sanctions on Russian crude and oil products took effect in December and February, respectively. Besides, last week’s bloc approved new sanctions against Russia with a price cap on Russian oil exports.

On Friday, Russia issued a decree letting it seize Exxon Mobil’s 30% stake. It gave a Russian state-run company the power to decide if the foreign shareholders, including India’s ONGC Videsh, can recall their project participation.