NEW YORK: ICE cotton futures extended losses on Monday to their lowest level in two weeks, tracking a pullback in wider financial and commodities markets on worries over a rapid surge in coronavirus cases.

The cotton contract for March was down 2.60 cents, or 2.4%, at 104.70 cents per lb by 11:11 a.m. EST (1611 GMT). It traded within a range of 104.5 and 107.69 cents a lb.

“A lot of markets including cotton are down on fear of the omicron coronavirus variant really spreading faster,” said Jack Scoville, vice president at Chicago-based Price Futures Group.

Scoville added that demand for US cotton has been pretty good, but that Omicron, as well as the Delta variant, were starting to lead to lockdowns again and “it’s kind of put the fear of God into a lot of these markets.”

Sentiment in financial markets remained fragile as many European nations weigh the possibility of restrictions during Christmas to slow the spread of the Omicron variant.

Oil prices slumped more than 5% as the variant’s rapid spread clouds the fuel demand outlook. Lower oil prices make polyester, a substitute for cotton, less expensive.

Speculators cut net long positions in cotton futures by 1,498 contracts to 69,214 in the week to Dec. 14, data from the Commodity Futures Trading Commission (CFTC) showed on Friday.

Total futures market volume fell by 4,609 to 12,980 lots. Data showed total open interest fell 205 to 233,593 contracts in the previous session.