Oil prices fell on Monday, paring gains from the previous session, as fears of a global recession weighed on the market. However, even as supply remains tight amid lower OPEC output, unrest in Libya and sanctions on Russia. Brent crude futures for September slipped 36 cents, or 0.3%, to $111.27 a barrel at 0300 GMT, Which having jumped 2.4% on Friday.
U.S. West Texas Intermediate (WTI) crude futures for August delivery dropped 34 cents, or 0.3%, to $108.09 a barrel, after climbing 2.5% on Friday.
The recession fears are the primary bearish factor that has capped the surge in oil prices. Rising rates and a plunge in consumer confidence have dented the fuel demand outlook. While data shows that the U.S. petroleum refinery capacity has improved,” said CMC Markets analyst Tina Teng.
Declines in Nigeria and Libya offset increases by Saudi Arabia and other large producers, and Libya faces further supply disruption due to escalating political unrest. Therefore, making the likelihood of OPEC meeting its newly increased production quotas even more unlikely.
Libya’s exports have dropped to between 365,000 bpd and 409,000 bpd. Which is down to about 865,000 bpd compared to normal levels, the National Oil Corp said last week. In a further hit to supply, a planned strike by Norwegian oil and gas workers this week. It could cut the country’s oil and condensate output by 130,000 bpd.