SINGAPORE (Reuters) – Oil prices fell on Monday as concerns about a sharp economic downturn outweigh supply disruptions from OPEC's production downturn and US sanctions against Iran and Venezuela.
FILE PHOTO: FILE PHOTO: An oil pump hunt pumps oil in a field near Calgary, Alberta, Canada July 21
Brent crude futures were $ 66.52 per barrel of 0102 GMT, down 51 cents, or 0.8 percent, from their last close.
U.S .. West Texas Intermediate (WTI) futures were at $ 58.42 per barrel, down 63 cents, or 1.1 percent, from their last settlement.
Both crude oil price indices have declined by more than 3 percent since last week, which peaked since November 2018.
Concerns about a possible US recession occurred late last week following bearish US Federal Reserve remarks sent 10 years Treasury dividends to the lowest since the beginning of 2018. In return, 10-year government bonds went below the three-month rate for the first time since 2007. Historically, a reverse yield curve – where long-term interest rates fall under short-term interest rates – has signaled a coming recession.
Add to the fear of a more widespread global decline, produced production data from Germany, Europe's largest economy, shrank for the third straight month.
"Estimates of growth and earnings have been revised substantially across all major regions," said US bank Morgan Stanley.
The ANZ bank said that the darker economic outlook "overshadowed supply issues" The oil market faced supply interruptions led by the producer club OPEC, as well as US sanctions against Venezuela and Iran.
The Organization of Petroleum Exporting Countries (OPEC) and non-affiliated allies such as Russia, collectively called OPEC +, have pledged to withhold around 1.2 million barrels per day (bpd) of oil supply in upstream markets, with OPEC's de facto Manager looked to push for a raw price of over $ 70 a barrel.
GRAPHIC: Russia, Saudi and the rest of OPEC crude oil production: tmsnrtrsrsCHCH9lJ
Reporting by Henning Gloystein; Editing by Joseph Radford