Image: Reuters Berita 24 English - On Monday, oil moved lower as concerns about a restricted supply due to decreased OPEC production, upheav...
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| Image: Reuters |
Berita 24 English - On Monday, oil moved lower as concerns about a restricted supply due to decreased OPEC production, upheaval in Libya, and sanctions against Russia were eclipsed by worries about a worldwide recession that would affect demand.
Data released on Friday revealed that Euro zone inflation reached yet another record high in June, supporting the case for swift rate increases from the European Central Bank beginning this month.
In June, consumer confidence in the US reached a record low.
After dropping more than $1 in early trade, Brent crude dropped 33 cents, or 0.3 percent, to $111.30 a barrel at 0815 GMT. West Texas Intermediate (WTI) crude for the United States dropped by 40 cents, or 0.4 percent, to $108.03.
The likelihood of an economic recession in the United States and other developed nations is very likely, according to Naeem Aslam of Avatrade, thus traders are concerned about reducing oil demand.
Brent nearly hit the record-breaking price of $147 per barrel set in 2008 this year as supply issues were exacerbated by Russia's invasion of Ukraine. In spite of worries about a recession, a lack of supply is preventing losses.
According to a Reuters survey, the Organization of the Petroleum Exporting Countries fell short of its goal to increase output in June. Recent turmoil in Ecuador has affected output, and a strike in Norway this week may reduce supply.
According to Stephen Brennock of oil broker PVM, "this backdrop of rising supply outages is colliding with a potential scarcity of spare production capacity among Middle Eastern oil exporters."
"And prices will be forced higher if additional oil output does not quickly enter the market."
