Brent crude futures slipped 53 cents, or 0.7%, to $76.28 a barrel and U.S. West Texas Intermediate crude futures were down 57 cents, or 0.6%, at $72.95
Oil futures extended losses in a volatile session on Monday as concerns of a recession in top oil consumer the US offset supply worries stemming from escalating tensions in the Middle East, the world’s biggest oil producing region.
Share markets also declined across Asia as U.S. recession concerns sent investors rushing from risk assets while wagering that rapid rate cuts will be needed to drive economic growth.
Brent crude futures slipped 53 cents, or 0.7%, to $76.28 a barrel by 0819 GMT. U.S. West Texas Intermediate crude futures were down 57 cents, or 0.6%, at $72.95.
Brent and WTI slid more than 3% on Friday, with both contracts marking their fourth consecutive week of losses – the biggest losing streaks since November.
U.S. recession concerns stoked by Friday’s weak July payrolls report “only add to Chinese demand concerns that have been lingering in the oil market for some time”, ING analysts led by Warren Patterson stated in a note.
Plunging diesel consumption in China, the world’s biggest contributor to oil demand growth, is weighing on oil prices.
Oil also came under pressure from a decision by the OPEC+ group of producers to stick to its plan to phase out voluntary output cuts from October, which means that supplies will increase later this year, according to analyst.
OPEC oil output increased in July despite production cuts by the group, a Reuters survey showed on Friday.
However, oil losses were capped by geopolitical risks in the Middle East.
The risk of a wider regional war, while I still think is small, cannot be ignored, according to Sydney-based IG market analyst Tony Sycamore.
Investors are also awaiting U.S. services data for last month to gauge the health of the country’s economy, Sycamore said.
