Oil prices fall as economic worries offset tightening supplies

An oil pumpjack is seen in Velma, Oklahoma U.S. April 7, 2016. (Reuters)

SULAIMANI (ESTA) — Oil prices fell on Monday as concerns over slowing global growth outweighed the prospect of tightening supply.

Brent crude fell 18 cents to $75.37 a barrel by 0625 GMT, while U.S. West Texas Intermediate (WTI) was at $74.39 per barrel, down 17 cents.

The spread of coronavirus variants and unequal access to vaccines threaten the global economic recovery, finance chiefs of the G20 large economies warned on Saturday, according to Reuters.

“We’ve not yet seen the impact but at this rate, it will hit demand sooner or later,” Reuters quoted a Singapore-based oil trader as saying.

Oil prices slumped last Tuesday after OPEC and their allies, a group known as OPEC+, did not reach an agreement to increase output from August after the United Arab Emirates rejected a proposed eight-month extension to the group’s output cuts.

“Prices are going to stay volatile for as long as the impasse remains,” Howie Lee, an economist at Singapore’s OCBC bank, told Reuters.

“On the surface it looks like it should support prices, but the risk remains that a complete breakdown will result in a price war not dissimilar to last year,” he said, but added that the probability of the latter event was low.

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