Oil prices steady amid worries of severe economic slowdown

Reuters: Oil prices were steady on Monday, with concerns of a sharp economic slowdown competing with support from tighter supply due to OPEC’s production cutbacks and US sanctions on Iran and Venezuela.

Brent crude oil futures were down 7 cents, or 0.1%, at $66.96 per barrel at 0955 GMT, while US West Texas Intermediate (WTI) futures were unchanged at $59.04 per barrel.

Both crude oil price benchmarks closed down on the week since briefly hitting their highest since November 2018.

Concerns about a potential US recession emerged Friday after cautious remarks by the US Federal Reserve caused 10-year treasury yields to slip below the three-month rate for the first time since 2007.

Historically, an inverted yield curve - where long-term rates fall below short-term - has signalled an upcoming recession.

“Oil prices are under pressure due to a combination of recession fears and gloomy market sentiment,” Commerzbank said.“Oil market-specific reports, which point to tighter supply, are preventing prices from falling any more sharply,” the bank added, noting a decline in US crude stocks and expenditure by US shale firms.

Bullish sentiment helped drive benchmarks to last week’s highs but may soon lead to a correction.