Brent crude extended losses to hit a 16-month low below $96 a barrel on Monday, as weak U.S. and Chinese economic data fanned renewed fears of a global economic slowdown, which would hit oil demand.
Brent crude fell for a fifth trading day, and at 1157 GMT was at $97.03 a barrel, or $1.40 lower, having briefly touched $95.63, its lowest since January 2011.
U.S. crude fell $0.87 to $82.36 a barrel after tumbling as low as $81.32 earlier in the session, its lowest level since last October.
"Market sentiment is still negative. The price is still falling despite the big sell off last week. Risk aversion is still on," Carsten Fritsch, oil and commodities analysts with Commerzbank said.
Oil ended May with the biggest monthly loss since December 2008 as Europe's ever-deepening debt crisis, poor U.S. jobs data and increasing signs of economic slowdown in China accelerated global cross market sell off.
A poor jobs market and a slowdown in manufacturing could lead to a drop in oil demand from consumers and industries alike.
Speculators cut their net long positions in Brent crude and U.S. crude futures in the week to May 29, figures separately issued by the Intercontinental Exchange (ICE) and U.S. Commodity Futures Trading Commission (CFTC) showed.
Global shares tumbled as investors fled from risky assets.
In Europe, the centre of the spreading debt crisis, the EuroSTOXX 50 stock index dipped slightly at the opening, but it bounced back on the increased likelihood of policy action from global central banks.
Safe haven U.S. and German government bond yields held near Friday's record lows.,
Tokyo's Topix index fell to a 28-year low of 693.26 while S&P 500 futures fell 0.7 percent, indicating yet more selling when investors wake up in North America.
Several monetary policy meetings are due this week, including of the European Central Bank on Wednesday and the Bank of England on Thursday, with investors watching for clues on how they will address global growth issues.
U.S. Federal Reserve Chairman Ben Bernanke will testify on Thursday before a congressional panel about the state of the U.S. economy.
STEALING THE SPOTLIGHT
Economic worries and decades-high crude production from OPEC power Saudi Arabia have overshadowed a possible disruption of Iranian supplies due to Western sanctions against Tehran. In May, both Brent and U.S. crude posted their biggest monthly losses since late 2008.
"With maximum production out of OPEC and global inventories built up, we are not likely to get a shortage situation," said Victor Shum, senior partner at oil consultancy Purvin & Gertz. "Saudi Arabia has definitely prepared for the possible loss of Iranian supplies."
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