Oil prices declined to almost an eight-month low on Monday as concerns over a recession in the U.S., the world’s top oil consumer, offset supply concerns amid escalating tensions in the Middle East.
Brent oil futures for October delivery declined 0.18 percent to $76.67 per barrel, while West Texas Intermediate (WTI) crude futures lost 0.30 percent to $73.30 per barrel as of 5:27 GMT.
Middle East tensions rise
Oil prices were supported by rising tension in the Middle East after talks in Cairo failed to bring results. Analysts expressed their concerns over conflict escalation, expressing that crude exports will likely take a hit if tensions persist.
Despite worries about escalating tensions in the Middle East, both Brent and WTI declined more than 3 percent to their lowest since January on Friday following a volatile week. Last week, both contracts marked their fourth consecutive week of losses, their biggest losing streaks since November.
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U.S. recession fears
U.S. recession fears sparked a further decline in oil prices after OPEC+ maintained its current plan of phasing out voluntary production cuts from October. The market had been expecting OPEC+ to delay the phase-out of voluntary production cuts beyond the third quarter.
In the U.S., the number of operating oil rigs remained stable at 482 last week, Baker Hughes said in its weekly report. Weak economic data globally weighed on oil prices, raising concerns that a weaker global economic recovery would dampen fuel consumption.
Last week, economic data revealed that the U.S. economy added fewer jobs than expected last month while factories across the U.S., China and Europe struggled with slower demand. Declining diesel consumption in China, the world’s biggest contributor to oil demand growth, is further weighing on global oil prices.
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