Oil dipped below the $50 per barrel mark on Tuesday due to concerns over a possible slowdown in the economic growth that would weigh down supply outages across Nigeria and other nations that export.
Trade in one of the largest property funds in Britain was suspended in one of the first signs of financial stress following the vote by the country to leave the European Union.
A flurry of new data will be soon released in China that is expected to show substantial weakness in both investment and trade.
Brent crude dropped $1.04 to $49.05 per barrel early Tuesday morning. The benchmark of global crude was still up over 80% from a low of 12 years it reached during January of $27.
U.S. crude fell $1.28 to a barrel price of $47.71.
Asia has remained quite weak and China has not provided that much support, said an oil analyst with Petromatrix. He also said that crude was being pressured by weak refined products.
The analyst added that without support of the products due to a structure of crude oil weakening, it is hard to think crude can move away to higher.
Barclays Bank based in Britain said concern regarding the world economy had weighed on oil prices.
The bank noted that the deterioration in the outlook of the global economy, uncertainty in the financial markets and ripple effects hitting key areas of the growth in oil demand likely will exacerbate already lackluster trends in industrial growth.
The data from China that is forthcoming is expected to also show industrial output that is sluggish and another drop in its foreign reserves that will only reinforce views that the Chinese government will announce more support measures for its economy.
Oil gained support for the first six months of 2016 from different signs that the glut in supply that halved the prices of oil during the past two years was easing and from outages that were unplanned in both Nigeria and Canada.
The Saudi Arabia energy minister who represents the largest exporter of oil in the world and the OPEC’s next secretary general agreed that the market was returning to a balance.
A partial Nigeria recovery contributed to an increase in the output from OPEC in June showed a survey taken late last week. However, some feel that the rebound could be short-lived.
A militant group of Nigerians that has carried out a number of attacks on the oil pipeline of the country claimed the responsibility for Sunday’s five attacks.