Oil prices fell slightly on Monday, coming under pressure from a stronger dollar amid signs of resurgent U.S. inflation, while concerns over slowing Chinese growth also dented sentiments.
Losses in crude markets were limited as recent production cuts by Saudi Arabia and Russia pointed to tighter markets. Crude prices remained close to their strongest levels for the year.
But while oil prices had a strong rally over the past two months, they faced some resistance in recent weeks as markets questioned the outlook for oil demand, amid worsening conditions in China and potentially higher U.S. interest rates.
Brent oil futures fell 0.1% to $86.61 a barrel, while West Texas Intermediate crude futures fell 0.2% to $83.03 a barrel by 21:58 ET (02:58 GMT).
The dollar was the biggest source of pressure on oil markets, with the greenback sitting at a five-week high after higher inflation readings from last week.
Data on Friday showed that U.S. producer price index inflation grew more than expected in July, coming just a day after data showed consumer price index inflation grew in July.
Higher inflation gives the Federal Reserve more impetus to hike interest rates, which in turn brightens the outlook for the dollar. A stronger dollar dents the prices of commodities priced in the greenback, and also hurts oil demand among international buyers.
