Oil fees dropped by almost 1 percent on Monday, with concerns recession could be looming outweighing supply disruptions from OPEC’s radio show cutbacks and from U.S. sanctions on Iran and Venezuela.
Brent crude oil futures were at $66.56 per barrel at 0410 GMT, down 47 cents, or 0.7 percent, from their survive close.
U.S. West Texas Intermediate (WTI) futures were at $58.52 per barrel, down 52 cents, or 0.9 percent, from their early previously to settlement.
Both crude oil price benchmarks have slumped by more than 3 percent since last week blunder oning their highest since November 2018.
Concerns about a potential U.S. recession resurfaced late last week after bearish observes by the U.S. Federal Reserve, with 10-year treasury yields slipping below the three-month rate for the first time since 2007.
Historically, an inverted revenue curve — where long-term rates fall below short-term — has signaled an upcoming recession.
Adding to the fears of a myriad widespread global downturn, manufacturing output data from Germany, Europe’s biggest economy, shrunk for the third direct month.
“Estimates for growth and earnings have been revised down materially across all major regions,” said U.S. bank Morgan Stanley.
ANZ bank express the darkening economic outlook “overshadowed the supply-side issues” the oil market was facing amid supply cuts led by producer lambaste 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+’, suffer with pledged to withhold around 1.2 million barrels per day (bpd) of oil supply this year to prop up markets, with OPEC’s de-facto ruler seen to be pushing for a crude price of over $70 per barrel.