Oil prices continued to fall on Monday morning, with both Brent and WTI dropping to their lowest levels since January. The collapse in oil prices, which started on Friday, was driven by fresh U.S. recession fears due to a weak July payrolls report.
Demand concerns from China have been weighing on oil prices for quite some time, and fears of a recession in the U.S. will only add to the downward pressure on oil prices.
Concerns over the U.S. economy reverberated around the world, with Asian stocks tumbling and the Nikkei posting its largest-ever decline, eclipsing the crash in October 1987 following Black Monday in New York.
While demand concerns are driving oil market sentiment, geopolitical risks remain very real. Israel is currently preparing for a potential retaliatory attack from Iran, with the U.S. sending defensive reinforcements to the region. The U.S. embassy in Lebanon has urged citizens to leave the country as soon as possible, further highlighting the risk of escalation in the region.