Investing.com — Oil prices slipped Monday, though moved off the lows of the day as upbeat U.S. services data eased concerns that the U.S. economy is heading for recession, while ongoing supply worries from rising tensions in the Middle East also boosted sentiment.
At 13:35 ET (17:35 GMT), Brent oil futures fell 0.6% to $76.40 a barrel, and West Texas Intermediate crude futures dropped 0.7% to $73.03 a barrel.
Oil prices rebound off lows on easing recession fears
The crude market moved off the lows of the session Monday as data showing U.S. services activity was in line with economists’ forecasts helped ease fears of an imminent recession.
U.S. oil prices had slumped to the lowest level since February earlier in the day after Friday’s weaker jobs report triggered recession fears.
The prospect of a recession in the world’s biggest fuel consumer bodes poorly for future demand, even as recent inventory data showed that increased travel demand during the summer season had kept fuel consumption high.
“Investors see US seasonal demand largely in line with the long-term average so far. Weaker economic data out of the US did not help,” ANZ Research said in a recent note.
Weak economic signals from China were also a major concern in recent weeks, as dismal data from the world’s biggest oil importer raised worries over slowing demand.
“China’s road traffic saw a seasonal decline for the third consecutive year, according to Bloomberg tracking data,” ANZ added.
Israel-Hamas fears remain in play
Concerns over a conflict in the Middle East – which could disrupt oil supplies from the crude-rich region – remain in focus as Israel continues its offensive in Gaza.
Israel has also been linked to the deaths of several high-profile leaders of Hamas and Hezbollah last week, drawing ire from the groups and raising the threat of an all-out war in the region.
This situation has kept traders attaching some risk premium to oil prices, although it did little to prevent oil’s sharp decline in recent weeks.
Peace talks between Israel and Hamas have shown little progress towards a ceasefire, even as the U.S. has called for de-escalation.
Tropical Storm Debby approaches Gulf Coast
Of additional interest is the incoming Tropical Storm Debby, which is expected to strengthen rapidly into a hurricane before making landfall on Florida’s Gulf Coast later in the session, according to the U.S. National Hurricane Center.
Oil major Chevron (NYSE:CVX) announced on Sunday that it had removed non-essential personnel from its facilities in the Gulf of Mexico, but production had yet to be impacted.
(Peter Nurse, Ambar Warrick contributed to this article.)
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