Oil prices slumped Monday as traders worried over the scope for global economic progress, while weekend discussions between Iran and critical powers concluded on an overall positive note, suggesting an easing of strains in the Middle East.
Brent crude futures were down by 23 cents, i.e., 0.4%, at $63.23 a barrel by 0427 GMT. Prices climbed 1.6% last week.
U.S. West Texas Intermediate crude was down by 9 cents, i.e., 0.2%, at $56.11 per barrel. WTI earned 1% last week.
Economic development in the US slowed less than anticipated in Q2 with a boom in customer spending, reinforcing the scope for oil consumption.
However, growth outside the U.S. is slowing faster, due partly to the impact of the U.S.-China trade spat.
Senior U.S. and Chinese mediators are meeting this week for the first time since trade talks collapsed in May, as they struggle to resolve deep gaps. Expectations for progress during the two-day Shanghai meeting are low.
Merchants and investors are focused on conferences of major central banks — including the U.S. Federal Reserve, which is anticipated to lower rates of interest.
An emergency meeting with parties to Iran’s 2015 nuclear deal was effective; however, there are unfinished issues, and Tehran will continue to reduce its atomic engagements if Europeans fail to restore the pact, Iranian official Abbas Araqchi stated on Sunday.
The meeting didn’t involve the US, which pulled out of the accord in May 2018 and imposed sanctions again on Iranian oil exports.
Denmark embraced the British government’s proposal for a European-led naval mission to ensure safe delivery through the strait.
The US is also engaged in a multinational maritime security mission in the Gulf.