# Oil prices slip as economic fears offset tightening crude supplies Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2021-07-12 Category: INVESTING Category URL: https://financedigest.com/category/investing Meta Title: Oil Slumps Amidst Variant Concerns - Global Economic Meta Description: Stay updated on how global economic recovery and tight crude supplies affect oil prices amid pandemic-related restrictions and demand uncertainties. URL: https://financedigest.com/oil-prices-slip-as-economic-fears-offset-tightening-crude-supplieshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2021-07-12t045427z2lynxmpeh6b00irtroptp4health-coronavirus-usa-1736838187283-compressed.jpg) By Laila Kearney NEW YORK (Reuters) -Oil slumped on Monday over concerns about spreading COVID-19 variants derailing the global economic recovery that has brought fuel demand to near pre-pandemic levels, while tight crude supplies kept prices from falling lower. Brent crude for September settled at $75.16 a barrel, losing 39 cents, or 0.5%. U.S. West Texas Intermediate crude for August settled at $74.10 a barrel, down 46 cents, or 0.6%. Both benchmarks shed about 1% last week, [stalling out a rally](https://www.financedigest.com/stocks-rally-stalls-eyes-powell-testimony-for-rate-clues.html "Stocks rally stalls, eyes Powell testimony for rate clues") that had brought both U.S. crude and Brent to [levels not seen since](https://www.financedigest.com/optimism-levels-drop-to-low-of-17-percent-according-to-first-survey-since-banking-regulations.html "Optimism levels drop to low of -17 percent, according to first survey since banking regulations") October 2018. Tokyo reimposed pandemic-related restrictions due to concerns over coronavirus infections, less than two weeks before the city hosts the Summer Olympic Games. It has [raised hackles in the market](https://www.financedigest.com/cosmetic-procedures-market-to-raise-at-a-cagr-of-7-5-over-the-forecast-period-2017-2025.html "Cosmetic Procedures Market To Raise At A CAGR Of 7.5% Over The Forecast Period 2017-2025") about demand recovery again,” said John Kilduff, a partner at Again Capital in New York. “Asia is obviously essential. It’s a swing demand center, and this is a huge setback.” The spread of new variants and unequal access to vaccines threaten the global economic recovery, [finance chiefs](https://www.financedigest.com/bootmaker-dr-martens-warns-on-profit-as-finance-chief-walks.html "Bootmaker Dr Martens warns on profit as finance chief walks") of the G20 large economies said over the weekend. The remarks weighed on the [oil demand outlook](https://www.financedigest.com/oil-prices-rebound-after-opec-upgrades-china-demand-outlook.html "Oil prices rebound after OPEC upgrades China demand outlook"). Traders are now refocusing on the spread of the COVID-19 pandemic and [global concerns](https://www.financedigest.com/oil-prices-steady-on-uncertain-global-outlook-and-supply-concerns.html "Oil prices steady on uncertain global outlook and supply concerns") over the new variants’ expansion,” Rystad Energy analyst Louise Dickson said. The Organization of the Petroleum Exporting Countries and their allies, a group known as OPEC+, abandoned talks last week that would have raised output, after a dispute between [Saudi Arabia](https://www.financedigest.com/avaya-opens-customer-experience-center-saudi-arabia.html "Avaya Opens Customer Experience Center in Saudi Arabia") and the United Arab Emirates about how to extend the pact. Analysts [say the collapse of talks raises the longer term prospect of producers abandoning the deal](https://www.financedigest.com/greece-britain-discussing-parthenon-sculptures-return-but-deal-not-close-athens-says.html "Greece, Britain discussing Parthenon Sculptures return but deal not close, Athens says") and pumping at will. That [concern fed](https://www.financedigest.com/shares-fall-with-oil-prices-amid-concerns-about-u-s-fed-rate-hikes.html "Shares fall with oil prices amid concerns about U.S. Fed rate hikes") trader fears last week, leading to a bout of selling that has not quite abated. “The longer the standoff … the greater the [possibility of some sustained price](https://www.financedigest.com/uniper-rescue-plan-takes-shape-with-price-rises-possible.html "Uniper rescue plan takes shape, with price rises possible") weakness,” said Jim Ritterbusch of Ritterbusch and Associates in Houston. For now, we still anticipate some movement this week with an OPEC+ [plan to disregard 2022 production quotas while focusing on the coming six months in which the UAE](https://www.financedigest.com/uae-plans-long-term-economic-ties-with-israel-despite-political-strains.html "UAE plans long-term economic ties with Israel despite political strains") demands for less production restraint may be accommodated. Helping to limit [oil price](https://www.financedigest.com/oil-ticks-up-as-u-s-inflation-cools-but-prices-set-for-monthly-drop.html "Oil ticks up as U.S. inflation cools, but prices set for monthly drop") losses, stockpiles in the biggest crude producing nation continued to tighten, with U.S. inventories falling to the lowest [since February 2020 in the week](https://www.financedigest.com/the-nasdaq-100-on-track-to-have-its-best-week-since-march-2010.html "The Nasdaq 100 On Track to Have its Best Week Since March 2010") to July 2. \[EIA/S\] [(Additional reporting by Noah Browning](https://www.financedigest.com/tailify-bolsters-leadership-team-with-addition-of-julia-burton-brown-as-commercial-director.html "Tailify bolsters leadership team with addition of Julia Burton Brown as Commercial Director") in London, Editing by Emelia Sithole-Matarise, Marguerita Choy, Sandra Maler, William Maclean) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---