Oil prices fell on Monday, ending five straight days of gains, as investors looked to slowing economic activity in China, the world’s biggest crude importer, which revived concerns about a global recession and falling global fuel demand.
Brent crude futures for December settlement fell by as much as 1.1%, and was last down 86 cents, or 0.9%, at $97.06 a barrel by 1111 GMT.
West Texas Intermediate crude for November delivery declined by as much as 1.1% and was last at $91.94 a barrel, down 70 cents, or 0.8%.
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The slowdown in the economy of China, the world’s second-largest oil consumer after the United States, adds to growing concerns about a possible global recession triggered by numerous central banks raising interest rates to combat high inflation rates.
“Oil … is getting hit with the triple whammy of China’s economic weakness, U.S. monetary policy tightening and Biden administration SPR intervention,” Stephen Innes, managing director at SPI Asset Management, said in a note.
Innes was referring to the possibility of additional releases from the U.S. Strategic Petroleum Reserve next month in response to the decision last week by the Organization of the Petroleum Exporting Countries and allies including Russia, known as OPEC+, to lower their output target by 2 million barrels per day
Brent and WTI posted their biggest weekly percentage gains since March after the reduction was announced.
The OPEC+ cuts, which come ahead of a European Union embargo on Russian oil, will squeeze supply in an already tight market. EU sanctions on Russian crude and oil products will take effect in December and February, respectively.
“OPEC+’s decision … will have a muted impact on the oil supply market as actual output cuts will be smaller,” Fitch Ratings said on Monday, noting that collectively the group was already producing less than its previous quotas.
“A recessionary economic outlook will lead to lower oil demand,” it added.
