Investing.com -- Crude oil prices tumbled again on Monday amid ongoing fears of looming oversupply in a world economy that is slowing sharply.
By 10:12 AM ET (1412 GMT), U.S. West Texas Intermediate futures were quoted down 84 cents, or 1.6%, at $53.03 a barrel, while the international benchmark Brent was down 1.8% at $58.33 a barrel.
Prices have now fallen by around $1.50 a barrel since their highs on Friday, hit as global markets priced in a smooth Brexit.
However, the British government is still unable to get its EU withdrawal agreement through the U.K. parliament, keeping a big question mark over demand from the U.K. and Europe, while other signs from around the world suggest that the supply side of the equation is also looking bearish.
Russia, the world’s second-largest oil producer, said on Sunday it breached its output ceiling under the so-called OPEC+ agreement in September due to an increase in natural gas condensate output as the country prepared for winter.
Additionally, OPEC members Kuwait and Saudi Arabia said they were making good progress in talks to resume oil production from joint fields in the Neutral Zone between the two countries after a three-year hiatus. The fields have a capacity of 500,000 barrels per day.
While that’s unlikely to hit the world market directly because both countries are still committed to the OPEC+ deal, it would raise the amount of spare capacity available to OPEC.
One modest hope of support for prices has come in the quarterly reports of the oilfield services companies, where both Halliburton (NYSE:HAL) and rival Schlumberger (NYSE:SLB) reported sharp drops in U.S. drilling in the three months to September. Halliburton said North American revenues were down 11% on the year, while Schlumberger on Friday took a $1.6 billion charge against its U.S. pumping business.
“These results from Halliburton bring into crystal-clear focus the speed with which North America (NAM) land well construction and completion activity eroded during course of Q3,” Tudor, Pickering, Holt & Co analysts wrote in a note.
- Reuters contributed to this report