Oil prices fell below $66 a barrel Monday as investors worried that crude demand will recover only slowly in the U.S. and brushed off upbeat economic growth data from Japan.
Benchmark crude for September delivery was down $1.63 to $65.88 a barrel by late morning in European electronic trading on the New York Mercantile Exchange. On Friday, the contract tumbled $3.01 to settle at $67.51.
Friday's big selloff was triggered by a sharp drop in the Reuters/University of Michigan consumer sentiment index, a bad sign for crude demand, which has already been sluggish this summer , The Associated Press reports.
"Commodities prices have come under significant pressure since Friday following the release of disappointing U.S. consumer confidence data and on the back of falling equity markets," wrote analysts at Commerzbank in a note to clients. Oil prices had tumbled 4.3% on Friday , MarketWatch reports.
Despite demand concerns, analysts say crude can still find support if equities or the dollar strengthen. "The best positive going for crude is that investor sentiment is driving crude now, and not fundamentals," Mr. Kornafel said , Wall Street Journal reports.