Oil prices slipped on Monday, with concerns of a sharp economic slowdown outweighing supply disruptions from the Organization of Petroleum Exporting Countries, OPEC’s production cutbacks and from U.S. sanctions on Iran and Venezuela.
Brent crude oil futures were at $66.73 per barrel at 0752 GMT, down 30 cents, or 0.5 percent, from their last close.
U.S. West Texas Intermediate (WTI) futures were at $58.69 per barrel, down 35 cents, or 0.6 percent, from their previous settlement.
It would be recalled that both crude oil price benchmarks have slumped by almost 3 percent since last week hitting their highest since November 2018.
Concerns about a potential U.S. recession emerged Friday after cautious remarks by the U.S. Federal Reserve caused 10-year treasury yields to slip below the three-month rate for the first time since 2007.
Adding to concerns of a widespread global downturn, manufacturing output data from Germany, Europe’s biggest economy, shrunk for the third straight month.
“Estimates for growth and earnings have been revised down materially across all major regions,” said U.S. bank Morgan Stanley.
ANZ bank said the darkening economic outlook overshadowed the supply-side issues the oil market was facing amid supply cuts led by producer club OPEC as well as the U.S. sanctions on Venezuela and Iran.
The Organization of the Petroleum Exporting Countries (OPEC) and non-affiliated allies such as Russia, together referred to as ‘OPEC+’, have pledged to withhold around 1.2 million barrels per day (bpd) of oil supply this year to prop up markets.