ICE Brent crude futures fall below $100/b as recession fears weigh

Crude oil futures extended declines for a third day in mid-morning Asian trade July 7, with the ICE Brent marker falling below $100/b as recession fears continued to weigh on oil prices.

At 10:11 am Singapore time (0211 GMT), the ICE September Brent futures contract was down $1.22/b (1.21%) from the previous close at $99.47/b, while the NYMEX August light sweet crude contract was down $1.02/b (1.04%) at $97.51/b.

Both crude oil markers were on track to post a third straight session of declines, with the front-month ICE Brent contract having shed close to 12% in value over the last two sessions.

Brent was now hovering at lows not seen since early April.

Recession fears were continuing to cast a shadow over sentiment in financial markets, with investors growing increasingly pessimistic amid fears that disruptions in oil and gas supplies won't be enough to offset any slowdown in global demand.

"Recession concerns are far from over, with oil prices delivering another 4% drop overnight," IG market strategist Yeap Jun Rong said in a July 7 note.

Analysts noted that oil prices could have further to fall in the event of a recession.

"Brent crude at $100/b would be indicative of only a mild recession," ANZ Research analysts Brian Martin and Daniel Hynes said in a note. "That support level could fall to $80/b in the unlikely event of global demand falling by 5%, which has only happened in the most severe of global recessions."

Analysts at US financial conglomerate Citi said in a note earlier in the week that oil prices could fall to $65/b by year-end if a recession does occur, media reports indicated.

On the supply side, Kazakhstan came close to having its oil supplies disrupted July 6. Loadings of the country's CPC blend from the Russian port of Novorossiisk were due to be suspended for 30 days by court order following an environmental case relating to spill prevention, the system operator said July 6.

Loadings of CPC Blend, however, are continuing for the time being as the operator of the Black Sea loading facility appeals the court order, sources said the same day.

Dubai crude swaps and intermonth spreads were lower in mid-morning trade in Asia July 7 from the previous close.

The September Dubai swap was pegged at $87.43/b at 10 am Singapore time (0200 GMT), down $4.48/b (4.87%) from the July 6 Asian market close.

The August-September Dubai swap intermonth spread was pegged at $3.83/b at 10 am, down 33 cents/b over the same period, and the September-October intermonth spread was pegged at $2.64/b, down 40 cents/b.

The September Brent/Dubai EFS was pegged at $11.79/b, down 83 cents/b.