Oil futures fell sharply Monday, handing back a large chunk of last week’s rally, as investors turned their attention back to a global crude glut and renewed worries over demand. On the New York Mercantile Exchange, light, sweet crude futures for delivery in February fell $1.29, or 3.4%, to end at $36.81 a barrel, snapping a four-session win streak that had sent the U.S. benchmark up 5.7% last week. U.S. oil futures remain down more than 30% since the end of last year.
February Brent crude on London’s ICE Futures exchange fell $1.27, or 3.4%, to $36.62 a barrel. Brent is down more than 36% this year.
Last week’s oil rally was inspired by an unexpected fall in U.S. crude inventories and a heavy round of short covering. But upside momentum appeared to stall Monday as fears of slowing economic conditions in China and Europe moved back into focus, wrote analysts at Tradition.
While slower growth could weigh on demand, worries over global stockpiles have also re-emerged, they said.