Oil prices ease to trade near 2-month lows on China demand fears, dollar strength

LONDON, Nov 21 (Reuters) - Oil prices dropped to trade near two-month lows on Monday, having earlier slid by around $1 a barrel, as supply fears receded while concerns over fuel demand from China and U.S. dollar strength weighed on prices.

Brent crude futures for January had slipped 65 cents, or 0.7%, to $86.97 a barrel by 1000 GMT.

U.S. West Texas Intermediate (WTI) crude futures for December were at $79.71 a barrel, down 37 cents or 0.5%, ahead of the contract's expiry later on Monday. The more active January contract was down 50 cents or 0.6% to $79.61 a barrel.

Both benchmarks closed Friday at their lowest since Sept. 27, extending losses for a second week, with Brent down 9% and WTI 10% lower.

"Apart from the weakened demand outlook due to China's COVID curbs, a rebound in the U.S. dollar today is also a bearish factor for oil prices," said CMC Markets analyst Tina Teng.