Higher U.S. interest rates as well as U.S.
Crude dropped to the lowest level since July 2017 as concerns over a weaker global economy and turbulence in Washington overshadowed signals from OPEC that it may deepen output cuts. The U.S. benchmark is down about 16 percent since the producer group announced the agreement.
"The planned cuts have been carefully studied, but if it doesn't work, we always have the option to hold an extraordinary OPEC meeting and we have done so in the past", Suhail Al Mazrouei, who is also OPEC president, said in Kuwait.
The macroeconomic picture and its impact on oil demand continue to pressure prices.
The makers' partnership, known as OPEC+, plans to bring down yield by 1.2 million barrels for each day, of which OPEC's offer is 800,000 bpd, one year from now, and a few priests have even proposed making further move.More news: Taliban welcomes partial United States withdrawal from Afghanistan
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Investors globally anxious about economic slowdown amid higher US interest rates and the US-China trade dispute. Today at 09:35 AM ET, the worldwide benchmark had recovered slightly, rising 1.34 percent to US$51.45 a barrel, after shedding as much as 6.2 percent in the previous trading session to close at US$50.47 a barrel, Reuters reports.
"I think there is a little bit of over-extension to the downside linked to global market fears", said Olivier Jakob, analyst at Petromatrix.
Earlier this month, OPEC and its allies led by Russian Federation, agreed to curb crude oil production by 1.2 million barrels per day starting in January. Bloomberg quoted a Rakuten Securities analyst as saying, "There are several bearish factors in oil markets, and the situation won't improve anytime soon".
WTI for February delivery was 25 cents higher at $42.78 a barrel on the New York Mercantile Exchange. Total volume traded Monday was about 42 percent below the 100-day average ahead of the Christmas holiday Tuesday.
Brent crude, the global benchmark, rose US$4, or 8 per cent, to settle at US$54.47 a barrel. They had fallen 6.2 percent to $50.47 a barrel in the previous session - the lowest since August 2017.
Brent for February settlement added $1.12/bbl to $51.59/bbl on the London-based ICE Futures Europe exchange after earlier dropping to as low as $49.93.