Global oil prices have dropped as an apparent economic slowdown has started to reduce demand for crude.
However, the losses were restricted after Saudi Arabia indicated that it is gradually reaching an agreement with other crude producers to extend the ongoing supply-cut deal.
Front-month Brent crude futures dropped 31 cents to $60.97 a barrel, while the US West Texas Intermediate (WTI) crude futures were down 20 cents at $53.05 per barrel, reported Reuters.
Prices of other energy products such as coal and gas were also affected by the slowdown.
The fall in oil prices was triggered as financial traders sold off energy markets owing to concerns on global economic prospects and trade impasse between the US and China.
Eastport was quoted by the news agency as saying: “The prolonged trade war has sparked fears of a global economic slowdown as well as weaker oil demand.”
According to the latest data, South Korea’s economy contracted by 0.4% in the first quarter of this year, indicating a potential downturn in Asia.
Oil futures prices dropped around 20% from their 2019 peak reached in late April. Last month, the benchmark incurred the highest monthly decline since November last year.
The Organization of the Petroleum Exporting Countries (OPEC) and other allied nations have been restricting supplies to the market since the beginning of this year in an attempt to revive prices.
The parties are scheduled to meet later this month or early July to discuss the future of output policy.
Meanwhile, Saudi Arabia Energy Minister Khalid al-Falih told Reuters that slowly a consensus is building up among the producers to ensure market stability.
However, their efforts are partially offset by increasing US production. At the end of last month, the US pumped 12.3 million barrels per day (bpd).