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Oil retreats as risk appetite shrinks
OIL extended its retreat as investor appetite for risk assets shrank and uncertainty persisted over how much Opec output will need to be cut to counter booming United States shale supplies.
Futures in New York lost 1.1 per cent, after falling for the first time in 10 sessions on Friday.
Equities slipped on Monday after the S&P 500 Index closed flat Friday, before a slew of bank profit reports and an earnings season.
Worries that global growth may be slowing due to a US-China trade war and a partial American government shutdown that's entered its fourth week are weighing on investor sentiment.
In the oil market, Saudi Energy Minister Khalid Al-Falih said the Opec+ coalition that is cutting output to shrink a glut will do more if needed and that the curbs are a "lifeline" to US shale drillers.
Crude is still down over 30 per cent from a four-year high in October even after a rally into a bull market earlier this month.
The CEO of Italian producer Eni SpA and Oman's oil minister said that prices around US$60 a barrel can be sustained on rising demand.
"Crude is reversing direction with the decline in equity markets as there are pre-earnings season jitters," said Stephen Innes, Singapore-based head of trading for Asia Pacific at Oanda Corp.
"While the Opec+ coalition has given more confidence that it will cut output in coming months, the market remains fragile and volatile while it waits for more news on US-China trade tensions."
West Texas Intermediate for February delivery declined as much as 74 cents to US$50.85 a barrel on the New York Mercantile Exchange, and traded at US$51 in Singapore.
It dropped 1.9 per cent on Friday, snapping its longest rising streak in nine years. Prices still ended 7.6 per cent higher last week.
Brent for March settlement fell 65 cents to US$59.83 a barrel on the London-based ICE Futures Europe exchange, after ending 6 per cent higher last week.
The global benchmark traded at a premium of US$8.52 a barrel to WTI for the same month. BLOOMBERG