Oil remains below $59 a barrel as worries about a recession grow
But the price of Brent is still up 10% in 2019 thanks to supply cuts led by oil cartel Opec and allies such as Russia
London — Oil slipped further below $60 a barrel on Thursday, extending the previous session’s 3% drop, pressured by mounting recession concerns and a surprise boost in US crude inventories.
In a sign of investor concern that the world's biggest economy could be heading for recession, weighing on oil demand, the US treasury bond yield curve inverted on Wednesday for the first time since 2007.
Brent crude was down 20 US cents at $59.28 a barrel by 8.40am GMT, after a 3% slide on Wednesday. US crude was down 11c to $55.12 a barrel.
“The market is becoming very anxious about global growth,” said Tamas Varga of oil broker PVM.
The price of Brent is still up 10% in 2019 thanks to supply cuts led by oil cartel Opec and allies such as Russia. Traders say they expect top exporter Saudi Arabia to reduce output further.
But the efforts by the Opec+ producer group to boost the market have been countered by worries about the global economy amid the US-China trade dispute and uncertainty over Brexit, as well as rising US stockpiles of crude.
China reported disappointing data for July, including a surprise drop in industrial output growth to a more than 17-year low. A slump in exports sent Germany's economy into reverse in the second quarter.
“Recession risk remains the focus,” said analysts at JBC Energy in a report.
A second week of unexpected rises in US crude inventories is adding to the pressure.
US crude stocks grew by 1.6-million barrels last week, compared with expectations for a drop of 2.8-million barrels, the Energy Information Administration (EIA) said.