Investing.com — Oil prices slipped Monday, though moved off the lows the day as upbeat U.S. services data eased concerns the U.S. economy is headed for recession, while ongoing supply worries from rising tensions in the Middle East also boosted sentiment.
At 13:35 ET (17:35 GMT), fell 0.6% to $76.40 a barrel, and dropped 0.7% to $73.03 a barrel.
Oil prices rebound off lows on easing recession fears
The crude market moved off the lows of the session Monday as data showing U.S. services activity was in-line with economists forecast helped eased fears of an imminent recession.
U.S. oil prices had slumped to the lowest level since February earlier in the day after Friday’s weaker jobs report triggered recession fears.
The prospect of a recession in the world’s biggest fuel consumer bodes poorly for future demand, even as recent inventory data showed that increased travel demand during the summer season had kept fuel consumption high.
“Investors see US seasonal demand largely in line with the long-term average so far. Weaker economic data out of the US did not help,” ANZ Research said in a recent note.
Weak economic signals from China were also a major point of pain in recent weeks, as dismal data from the world’s biggest oil importer pushed up concerns over slowing demand.
“China’s road traffic saw a seasonal decline for the third consecutive year, according to Bloomberg tracking data,” ANZ added.
Israel-Hamas fears remain in play
Concerns over a conflict in the Middle East – which could disrupt oil supplies from the crude-rich region – remained in play, as Israel kept up its offensive in Gaza.
Israel had also been linked with the deaths of several high-profile leaders of Hamas and Hezbollah last week, drawing ire from the groups and raising the threat of an all-out war in the region.
This notion had kept traders attaching some element of risk premium to oil prices, although it still did little to deter oil’s sharp decline in recent weeks.
Peace talks between Israel and Hamas appeared to have yielded little progress towards a ceasefire, even as the U.S. called for a deescalation.
Tropical Storm Debby approaches Gulf Coast
Also of interest is the incoming Tropical Storm Debby, which is expected to strengthen rapidly into a hurricane before making landfall in Florida’s Gulf Coast later in the session, the U.S. National Hurricane Center said on Sunday.
Oil major Chevron (NYSE:) said on Sunday that it had removed non-essential personnel from its facilities in the Gulf of Mexico, but production had yet to be impacted.
(Peter Nurse, Ambar Warrick contributed to this article.)