Investor fears about the likelihood of faster than expected interest rate hikes by the US Federal Reserve drove down risk markets such as equities while the currency rose.
According to Reuters, Wall Street stocks fell after having their worst week since 2020 last week, dragging other risk assets like oil down with it.
“Everything is being taken out to the woodshed and the woodshed is a pretty crowded place,” said John Kilduff, a partner at Again Capital Management.
Brent crude fell $1.62, or 1.8 percent, to $86.27 a barrel, while U.S. West Texas Intermediate (WTI) crude settled down $1.83, or 2.2 percent, to $83.31.
Both benchmarks rose for a fifth week in a row last week, gaining about 2 percent to reach their highest since October 2014.
Oil prices are up more than 10 percent this year on the concerns over tightening supplies and OPEC+ now struggling to hit a targeted monthly output increase of 400,000 barrels per day.
The Relative Strength Index, a measure of short-term market sentiment, had until Monday been trading at levels considered indicative of a near-term correction in oil.
“Big picture, we believe oil is going higher over the long run, but short-term we’ve gotten overbought and juiced up on geopolitical risk,” said Flynn.
