Oil prices down on worries of recession in major economies

Oil prices fell on Monday, retreating from three-month highs, as growing concerns over a potential recession in major global economies heightened fears that global oil demand could slow.

The international benchmark Brent crude fell by 0.6%, reaching $76.01 per barrel at 0757GMT, down from $76.47 at the close of the previous session.

The US benchmark West Texas Intermediate (WTI) declined by 0.6%, dropping to $73.18 per barrel, compared to its prior session close of $73.63.

The uncertainty surrounding the trade policies of the incoming US administration continues to influence commodity prices, while also impacting the Federal Reserve’s (Fed) policy outlook.

Market participants are awaiting the release of US employment data and the minutes from this week’s Federal Open Market Committee (FOMC) meeting.

While the Fed is expected to implement only two interest rate cuts this year, market players will look to the FOMC meeting minutes, due on Wednesday, for further insights into the central bank’s future policy direction.

The Fed is likely to maintain its policy rate at current levels in its first monetary policy decision of the year on Jan. 29.

Richmond Fed President Tom Barkin, speaking on Friday, highlighted the key variables influencing the Fed’s interest rate decisions and suggested that it would be prudent to wait and gather more information before making decisions.

Developments in the US, the world’s largest oil consumer, highlight concerns about an economic slowdown that could dampen oil demand.

Also, analysts noted that economic activity in China remains below desired levels, with weak domestic demand continuing to pose a challenge.

Experts cautioned that potential risks in China, the world’s biggest crude importer, could significantly affect the global economic landscape. ANADOLU