London, August 17: Oil fell to below $66 a barrel on Monday, touching its lowest this month, 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 percent slide on Friday — the biggest loss since July 29 — 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.
U.S. crude oil futures for September fell $1.73 to $65.78 a barrel by 1115 GMT (6:15 a.m. EDT). Prices hit an intra-day low of $65.65, the lowest since July 31. Brent crude for October lost $1.80 to $69.64.
Asian stocks slid as investors became more cautious about the pace of the global economic recovery, souring appetite for risky assets. European shares also fell, while the dollar rose against a basket of currencies.
Investors were torn between hopes China will help to pull the world economy out of recession and worries about a major correction in its stock market. Chinese shares fell 5.8 percent on Monday.
Oil’s decline on Friday brought it to a weekly loss of 4.8 percent, snapping a four-week streak of gains that were largely fueled 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 will be a long road to a sustained recovery in the world’s third largest oil consumer.
Although the hurricane season has arrived in the Atlantic, analysts said brimming crude stockpiles in the United States would limit the impact of a storm on oil prices.
Tropical Storm Claudette moved ashore along the U.S. Gulf Coast early on Monday and had swept through the Gulf of Mexico, bypassing the heaviest concentration of U.S. energy platforms.
The six-month hurricane season got off to a slow start with no storms in the first 2-1/2 months but intensified this weekend as three formed in just over a day.
—–Agencies