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Oil Prices Extend Losses On Demand Worries, Dollar Surge

Oil prices fell on Monday to levels not seen since early January on fears of lower fuel demand from an expected global recession.

Benchmark Brent crude futures dipped 0.7 percent to $84.47 a barrel, while U.S. crude futures traded 0.6 percent lower at $78.27.

Both contracts plunged around 5 percent on Friday to test eight-month lows on concerns that a possible global recession due to aggressive policy tightening by major central banks will dent demand for crude.

Meanwhile, fears grew about the stability of U.K. government finances after Chancellor of the Exchequer Kwasi Kwarteng announced the biggest package of unfunded tax cuts.

The dollar's strong uptick also weighed on oil prices. The dollar index, which tracks the greenback against a basket of six other currencies, climbed to a fresh 20-year high, making all commodities, including oil, which are denominated in dollars more expensive for foreign buyers.

The disruptions in the oil market from the Russia-Ukraine war has lent some support to prices.

The EU is set to ban Russian crude oil from December in a move to strip the Kremlin of revenue.

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