Brent crude drops to 16-month low on economic data
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Brent crude prices fell below $98 a barrel to a 16-month low on Monday, pressured by fears of a global economic slowdown following weak U.S. and Chinese economic data.
Brent crude for July delivery dropped more than $1 to an intraday low of $97.06 by 0443 GMT, the lowest since January 2011.
U.S. crude fell $1.44 to $81.79 a barrel after tumbling to as low as $81.59 earlier in the session, the lowest since October 2011.
Data on Friday showed U.S. job growth stumbling in May, causing the country's unemployment rate to rise for the first time in nearly a year. China also added to the gloom, reporting a slowdown in the country's manufacturing sector.
"The market is digesting all the bad data that came out last week," said Tony Nunan, a Tokyo-based risk manager at Mitsubishi Corp.
"Brent at $100 was a strong psychological support and we just blew through that. So now I think people will be taking their money out of risky assets because everybody is afraid to pick a bottom."
In May, both Brent and U.S. crude posted their biggest monthly losses since late 2008, as global economic concerns offset fears of a possible disruption to Iranian oil supplies due to Western sanctions against Tehran.
Investors also remained cautious over the escalating financial turmoil in Europe.
Spanish Prime Minister Mariano Rajoy on Saturday called for the establishment of a central authority that would oversee and coordinate fiscal policy in the eurozone.
Germany also wants a big leap forward in euro integration, but investors are doubtful whether the close integration could restore market confidence.
Traders are closely watching several monetary policy meetings due this week, including the European Central Bank on Wednesday and Bank of England on Thursday, for clues on their responses to vulnerable global growth.
U.S. Federal Reserve Chairman Ben Bernanke on Thursday will testify before a congressional committee about the state of the U.S. economy.
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