Press "Enter" to skip to content

Oil slips further below $60 on recession concerns, US supply

The price of Brent is still up 10 percent this year thanks to supply cuts led by the Organization of the Petroleum Exporting Countries and allies such as Russia. (Reuters)

Oil slipped further below $60 a barrel on Thursday, extending the previous session’s 3% drop, pressured by mounting recession concerns and a surprise boost in U.S. crude inventories. In a sign of investor concern that the world’s biggest economy could be heading for recession, weighing on oil demand, the U.S. Treasury bond yield curve inverted on Wednesday for the first time since 2007.

Brent crude was down 20 cents at $59.28 a barrel by 0840 GMT, after a 3% slide on Wednesday. U.S. crude was down 11 cents to $55.12 a barrel. “The market is becoming very anxious about global growth,” said Tamas Varga of oil broker PVM.

Also read: Bitcoin slumps to two-week low on technical trading, market jitters

The price of Brent is still up 10 percent this year thanks to supply cuts led by the Organization of the Petroleum Exporting Countries and allies such as Russia. Traders say they expect top exporter Saudi Arabia to reduce output further. But the efforts by the OPEC+ producer group to boost the market have been countered by worries about the global economy amid the U.S.-China trade dispute and uncertainty over Brexit, as well as rising U.S. stockpiles of crude.

China reported disappointing data for July, including a surprise drop in industrial output growth to a more than 17-year low. A slump in exports sent Germany’s economy into reverse in the second quarter. “Recession risk remains the focus,” said analysts at JBC Energy in a report.

A second week of unexpected rises in U.S. crude inventories is adding to the pressure. U.S. crude stocks grew by 1.6 million barrels last week, compared with expectations for a drop of 2.8 million barrels, the Energy Information Administration (EIA) said.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Source: Financial Express