08:56 AM EDT, 07/29/2024 (MT Newswires) -- Oil prices weakened for a second-straight session early on Monday, dropping to a seven-week low amid weak risk appetite.

West Texas Intermediate crude for September delivery was last seen down US$0.61 to US$76.55 per barrel, the lowest since June 7, while September Brent crude, the global benchmark, was down US$0.58 to US$80.55.

The drop comes as the market remains in summer doldrums with weak demand from China, the No.1 importer. somewhat offset by geopolitical concerns over spreading Middle East violence as Israel and the Iran-backed Hezbollah militant group in Lebanon trade attacks.

"Traders and investors holding elevated longs have been hurt by the recent loss of risk appetite across equity markets with energy and industrial suffering the most amid ongoing concerns about demand in China," Saxo Bank noted.

This week's meeting of the Federal Reserve's policy committee is also cutting risk appetite, though the two-day meeting is expected to end on Wednesday leaving interest rates unchanged at a 23-year high. The central bank is not expected to begin a cycle of rate cuts until September, even as other central banks have already begun easing. The Federal Open Market Committee's outlook, the dot plot, will be closely watched.

"Even if the FOMC decision on Wednesday is that of an unchanged one, what will be signposted going forward into September is now becoming make or break. Another delay will come with consequences, none that are good," PVM Oil Associates noted.