Oil falls more than 4 percent following stock market down

Oil prices tumbled more than 4 percent on Monday to the lowest in over a year as global stock markets fell on concerns about a U.S. government shutdown and worsening world economy.

U.S. crude hit the lowest since June 26, 2017 and global benchmark Brent fell to the weakest since Aug. 31, 2017 ahead of an early market settlement due to the Christmas holiday.

Crude futures have fallen more than 30 percent so far this quarter, to the lowest since the third quarter of 2017, as jitters have grown about the impact of an escalating U.S.-China trade dispute on global growth and crude demand.

Markets across asset classes have come under pressure as a U.S. government shutdown intensified growth concerns. Investors have flocked to safe-haven assets such as gold and government debt at the expense of crude oil and stocks.

A gauge of stocks worldwide hurtled toward an eighth straight decline on Monday as investors ignored the U.S. Treasury secretary`s actions to reinforce confidence in the economy and U.S. President Donald Trump criticized the Federal Reserve as "the only problem our economy has."

The U.S. Senate has been unable to break an impasse over Trump`s demand for more funds for a wall on the border with Mexico, and a senior official said the shutdown could continue until Jan. 3.

Brent crude futures were down $2.67 a barrel at $51.15 by 1:19 p.m. ET, having touched a session low of $51.14 a barrel. U.S. crude futures fell $2.24 to trade at $43.35, after dropping to a session low of $43.30.

Brent fell 11 percent last week and hit its lowest since September 2017, while U.S. futures slid to their lowest since July 2017, bringing the decline in the two contracts to 35 percent so far this quarter.

The macroeconomic picture and its impact on oil demand continue to pressure prices. Global equities <.miwd00000pus> have fallen nearly 9.5 percent so far in December, their biggest one-month slide since September 2011, when the euro zone debt crisis was unfolding.

The U.S.-China trade dispute and the prospect of a rapid rise in U.S. interest rates have brought global stocks down from this year`s record highs and ignited concern that oil demand will be insufficient to soak up any excess supply.

The Organization of the Petroleum Exporting Countries and allies led by Russia agreed this month to cut oil production by 1.2 million barrels per day from January.

Should that fail to balance the market, OPEC and its allies will hold an extraordinary meeting, United Arab Emirates Energy Minister Suhail al-Mazrouei said on Sunday.

"Oil ministers are already taking to the airwaves with a `price stability at all cost` mantra," said Stephen Innes, head of trading for Asia-Pacific at futures brokerage Oanda in Singapore.

(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)