Oil prices fell to below $99 a barrel Monday in Asia, extending a big loss from Friday after a report said Saudi Arabia plans to boost its crude production.
Benchmark oil for July delivery was down 57 cents to $98.72 a barrel at late afternoon Singapore time in electronic trading on the New York Mercantile Exchange. The contract lost $2.64 to settle at $99.29 on Friday.
In London, Brent crude for July delivery was down 36 cents to $118.42 a barrel on the ICE Futures exchange.
Saudi newspaper al-Hayat reported Friday that the country will increase production 13 percent, or about 1.14 million barrels per day, to boost global supplies and help lower prices. Earlier last week, the Organization of Petroleum Exporting Countries failed to reach consensus to raise output and left the cartel's production quotas unchanged.
Fighting in Libya since February has shrunk global crude output by shutting down the OPEC nation's 1.6 million barrels a day of production. Political violence and upheaval in the Middle East and North Africa this year has probably added about $15 to the price of oil, said Paul Sheard, global chief economist at Nomura.
"There's quite a substantial risk premium built into the oil markets at the moment," Sheard said. "Oil is one of the wild cards of the global economy."
Nomura expects Brent to average $109 this year and $107 next year.
Analysts are concerned an escalation of violence and instability in the Middle East would send oil prices higher and undermine global economic growth.
"If Brent goes to $140, for sure you're going to have a double-dip recession in most advanced economies," said Nouriel Roubini, the New York University economics professor known for predicting the financial crisis. "Demand is growing fast and supply is not growing fast enough."
This week, investors will be eyeing the latest economic data from the U.S. and China. Some analysts expect Chinese crude consumption to remain robust despite signs economic growth may be weakening.
"Chinese oil demand growth has shown no signs of a slowdown this year, despite economic activity moderating," Barclays Capital said in a report. "The growth path is unlikely to be altered significantly by moderating overall economic activity."
US retail sales and Chinese inflation and industrial production figures are scheduled to be released Tuesday.
In other Nymex trading in July contracts, heating oil rose dipped 1 cent to $3.10 a gallon while gasoline added 0.3 cents to $3.02 a gallon. Natural gas futures gained 0.4 cents at $4.76 per 1,000 cubic feet.