London: Oil slipped to its lowest this month at below $66 a barrel on Monday as investors became more cautious about the pace of global economic recovery and any revival in energy demand.
The decline added to the market’s $3.01, or 4.3% slide on Friday — the biggest loss since 29 July — after the Reuters/University of Michigan Survey of Consumers showed confidence in early August dropped.
“It’s a very weak market, continuing the weak tone on Friday, linked to falling stock markets and more bearish sentiment about demand,” said Christopher Bellew, a broker at Bache Commodities.
US crude oil futures for September fell $1.31 to $66.20 a barrel by 6:27am. Prices earlier hit an intra-day low of $65.65, the lowest since 31 July. Brent crude for October lost $1.4 to $70.04.
European shares fell, following losses in Asia. The dollar rose against a basket of currencies.
US stocks were expected to open lower, even after a gauge of manufacturing in New York state moved into positive territory in August, suggesting growth in the sector for the first time since April 2008.
Oil’s decline on Friday brought it to a weekly loss of 4.8%, snapping a four-week streak of gains that were largely fuelled by optimism the global economy had turned a corner and recovery would boost energy demand.
Japan’s economy emerged from its longest recession in at least 60 years in the second quarter, but analysts said it would be a long road to a sustained recovery in the world’s third-largest oil consumer.
Although the Atlantic hurricane season, which can disrupt Gulf of Mexico oil and gas production, has arrived, analysts said brimming crude stockpiles in the US would limit the impact of a storm on oil prices.
With Claudette downgraded to a tropical depression over southern Alabama, the energy market on Monday started to focus on Tropical Depression Ana as it moved towards Hispaniola, Cuba and Florida.
The US National Hurricane Center did not expect much from Ana. The system will likely be a mere remnant of the depression when it reaches the Florida Panhandle later this week near where Claudette struck the coast.
Hurricane Bill was expected to spare the Caribbean Islands and the Gulf of Mexico as it targets Bermuda and the US East Coast, the NHC and other weather models forecast.