Oil hovers at 8-month lows as U.S. recession fears offset Mideast tensions
Shafaq News/ Oil prices hovered at eight-month lows on Monday as fearsof a recession in the United States, the world's top oil consumer, offsetconcerns that escalating tensions in the Middle East may affect supplies fromthe largest producing region.
Brent crude futures inched down 4 cents, or 0.1%, to $76.77 a barrel by0035 GMT, while U.S. West Texas Intermediate crude futures were at $73.39 abarrel, down 13 cents, or 0.2%.
Prices were supported by persistent fighting in Gaza with an Israeliairstrike hitting two schools and killing at least 30 people on Sunday,Palestinian officials said, the day after a round of talks in Cairo endedwithout result.
Israel and the United States are bracing for a serious escalation in theregion after Iran and its allies Hamas and Hezbollah pledged to retaliateagainst Israel for the killings of Hamas' leader Ismail Haniyeh and Fuad Shukr,a top military commander from Lebanese armed group Hezbollah last week.
"If this conflict intensifies, crude exports could beimpacted," ANZ analysts said in a note.
Despite worries about escalating tensions in the Middle East, Brent andWTI tumbled more than 3% to settle at their lowest since January on Friday in avolatile week. Last week, both contracts marked their fourth straight week oflosses, their biggest losing streaks since November.
Oil prices were dragged down by U.S. recession fears and after OPEC+, analliance between the Organization of the Petroleum Exporting Countries andother producers such as Russia, stuck to its plan to phase out voluntaryproduction cuts from October.
The market had been expecting OPEC+ to delay the phase out of voluntaryproduction cuts beyond the third quarter, ANZ analysts said.
A Reuters survey showed on Friday that OPEC oil output rose in Julydespite production cuts by the group.
In the U.S., the number of operating oil rigs were steady at 482 lastweek, Baker Hughes said in a weekly report.
Weak economic data across the globe weighed on oil prices, on concernsthat a sluggish global economic recovery would dampen fuel consumption.
Data released last week showed that the U.S. economy added fewer jobsthan expected last month while factories across the U.S., China and Europegrappled with tepid demand.
Slumping diesel consumption in China, the world's biggest contributor tooil demand growth, is weighing on global oil prices.
(Reuters)
