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Oil prices fell on Monday as concerns about a recession in the United States, the world’s largest oil consumer, offset worries that escalating tensions in the Middle East could hit supplies from the top producing region.
Brent crude futures fell 4 cents, or 0.1%, to $76.77 a barrel by 0035 GMT, while U.S. West Texas Intermediate crude futures fell 13 cents, or 0.2%, to $73.39 a barrel.
Oil prices were supported by ongoing fighting in Gaza, a day after a round of talks in Cairo ended inconclusively, with Israeli air strikes hitting two schools on Sunday, killing at least 30 people, Palestinian officials said.
Israel and the United States are bracing for a serious escalation in the region after Iran and its allies Hamas and Hezbollah vowed to retaliate against Israel for the killing last week of Hamas leader Ismail Haniyeh and top Lebanese militant group Hezbollah military commander Fuad Shukr.
“If the conflict escalates, crude oil exports could be affected,” ANZ analysts said in a note.
Brent crude fell more than 3% on Friday to close at its lowest level since January despite concerns about escalating tensions in the Middle East, while WTI crude fell more than 3% to close at its lowest level since June.
Both contracts fell for the fourth consecutive week, marking the biggest drop since November last year.
Oil prices fell on fears of a U.S. recession after the Organization of the Petroleum Exporting Countries (OPEC) and other producers including Russia, a coalition known as OPEC+, stuck to plans to phase out voluntary production cuts from October.
ANZ analysts said the market had previously expected OPEC+ to delay the gradual withdrawal of voluntary production cuts until after the third quarter.
OPEC’s oil output increased in July despite cuts, a Reuters survey showed on Friday.
The number of operating U.S. oil rigs remained steady at 482 last week, Baker Hughes said in a weekly report.
Weak economic data around the world weighed on oil prices amid concerns that a slow global economic recovery would curb fuel consumption.
Data last week showed the U.S. economy added fewer jobs than expected last month, while factories in the United States, China and Europe are struggling with sluggish demand.
China is the biggest contributor to global oil demand growth, but a sharp drop in diesel consumption in the country has put pressure on global oil prices.
Source: Reuters
Posts Oil prices fall as U.S. recession fears offset Middle East tensions First appeared in Daily News.
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