Oil prices fell more than one per cent overnight, in conjunction with sagging stock markets after US President Donald Trump threatened more tariffs on Chinese imports ahead of the coming G20 summit.
Brent crude futures fell $1 to $US59.48 a barrel, a 1.7 per cent loss.
US West Texas Intermediate crude futures fell 84 cents to $US50.79 a barrel, a 1.6 per cent loss.
Prices fell to their lowest since October 2017 last week – Brent at $US58.41 and WTI at $US50.15.
US stock markets declined after President Donald Trump’s threat to move ahead with additional tariffs on Chinese goods dampened hopes of resolving the trade fight at the upcoming G20 Summit.
Earlier reports said Trump was also considering tariffs on most imported cars as well.
Both crude benchmarks are down more than 30 per cent since early October, depressed by an emerging supply overhang and widespread financial market weakness.
‘Oil prices have come under pressure in tandem with weakness in equities,’ said Abhishek Kumar, senior energy analyst at Interfax Energy in London.
‘The Brent crude front-month futures price falling below the $US60 a barrel key technical support level has further exacerbated selling in the oil complex.’
Leaders of the Group of 20 nations, the world’s biggest economies, will meet on November 30 and December 1, with the trade war between Washington and Beijing atop the agenda.
The top three crude producers, Russia, the United States and Saudi Arabia, will all be at the summit, raising expectations that oil policy will be discussed.
The Organisation of the Petroleum Exporting Countries will meet on December 6 in Vienna to discuss output policy with some non-OPEC producers, including Russia.
Saudi Arabia raised oil production to a record high in November, an industry source said on Monday, pumping 11.1 million to 11.3 million barrels per day.
But the kingdom has been pushing for a collective production cut and is discussing a proposal to curb output by OPEC and its allies as much as 1.4 million bpd, sources close to the discussions told Reuters this month.
Trump has pressured Saudi Arabia, OPEC’s de-facto leader, not to cut production.
‘We feel that the Saudis will attempt to try to tread a fine line between placating Trump and driving some production decisions capable of halting the dramatic price plunge of the past couple of months,’ Jim Ritterbusch, president of Ritterbusch and Associates, said in a note.
US crude production also hit a record high this month of 11.7 million bpd, with stockpiles rising for nine straight weeks.
Weekly industry data on US crude inventories is set to be released around Wall Street’s close, with analysts expecting stockpiles to have risen 800,000 barrels in the week ended November 23.