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Brent crude fell $1.49, or 1.3%, to $112.01 a barrel by 1020
GMT.
U.S. West Texas Intermediate (WTI) crude fell 15 cents, or 0.1%,
to $108.28 a barrel, from Friday's close. There was no
settlement for WTI on Monday because of the Independence Day
public holiday in the United States.
"Oil is still struggling to break out from its current
recessionary malaise as the market pivots away from inflation to
economic despair," Stephen Innes of SPI Asset Management said in
a note.
Investors are becoming more concerned as the latest surge in gas
and fuel prices added to worries about a recession.
In South Korea, inflation in June hit a near 24-year high,
adding to concerns of slowing economic growth and oil demand.
Data showed business growth across the euro zone slowed further
last month, with forward looking indicators suggesting the
region could slip into decline this quarter as the cost of
living crisis keeps consumers wary.
However, supply concerns still loomed. Earlier in the session,
WTI rose more than $3 and Brent more than $1 on reports of
output disruption in Norway.
Norwegian offshore workers began a strike that will reduce oil
and gas output, the union leading the industrial action told
Reuters.
The strike is expected to reduce oil and gas output by 89,000
barrels of oil equivalent per day (boepd), of which gas output
makes up 27,500 boepd, Norwegian producer Equinor has said.
"Oil prices are ... benefiting from the strike in Norway, so far
impacting only modest volumes, and the sharp increase in Saudi
official selling prices for August, suggesting that Saudi
exports might not increase that much next month," UBS analyst
Giovanni Staunovo said.
Saudi Arabia, the world's top oil exporter, raised August crude
oil prices for Asian buyers to near record levels amid tight
supply and robust demand.
The official selling price (OSP) for August-loading Arab Light
to Asia was raised by $2.80 a barrel from July to $9.30 a barrel
over Oman/Dubai quotes, people familiar with the matter said,
close to the record high premium of $9.35 per barrel hit in May.
"We suspect corrections in the energy market during the second
quarter may end up being short-lived, with the risk of a
prolonged period of high prices the most likely outcome," said
Ole Hansen, head of commodity strategy at Saxo Bank, adding
prices would trade within a wide range of $100 to $125.
(Reporting by Bozorgmehr Sharafedin in London, Additioanl
reporting by Florence Tan and Muyu Xu; editing by Christian
Schmollinger and Jason Neely)
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