Oil nears 2018 lows as stock markets slide

An image of rising and declining prices Credit: Shutterstock photo

* Brent, U.S. crude near lowest levels since Q3 2017

* OPEC+ to meet again if cuts not enough - UAE

* Physical markets weak as Asian refiners cut purchases (Updates prices)

LONDON, Dec 24 (Reuters) - Oil prices dropped on Monday,nearing their lowest level this year, in line with anotherdecline across global stock markets, which came under pressurefrom concern about a U.S. government shutdown and a worseningworld economy.

The price of oil has already fallen by more than 30 percentso far this quarter to its lowest since the third quarter of2017, as investors have grown increasingly wary of the impact toglobal growth, and crude demand, from an escalating tradedispute between the United States and China.

The U.S. Senate has been unable to break an impasse overU.S. President Donald Trump's demand for more funds for a wallon the border with Mexico, and a senior official said theshutdown could continue until Jan. 3.

Investors have flocked to perceived safe-haven assets suchas gold and government debt, at the expense of crude oil andstocks.

Brent crude futures LCOc1 were down 58 cents at $53.24 abarrel by 1450 GMT, having fallen from a session high of $54.66,while U.S. crude futures CLc1 fell 90 cents to trade at$44.69.

Brent fell 11 percent last week and hit its lowest sinceSeptember 2017, while U.S. futures slid to their lowest sinceJuly 2017, bringing the decline in the two contracts to 35percent so far this quarter.

"Today is going to be a market of very thin liquidity and wedon't have strong convictions in such market conditions. Brenthas managed to break 55.00 $/bbl at the end of last week, theshort-term momentum is negative," Petromatrix strategist OlivierJakob said.

The macroeconomic picture and its impact on oil demandcontinue to pressure prices. Global equities .MIWD00000PUS have fallen nearly 9.5 percent so far in December, their biggestone-month slide since September 2011, when the euro zone debtcrisis was unfolding.

The trade dispute between the United States and China andthe prospect of a rapid rise in U.S. interest rates have broughtglobal stocks down from this year's record highs and ignitedconcern that oil demand will be insufficient to soak up anyexcess supply.

The Organization of the Petroleum Exporting Countries andallies led by Russia agreed this month to cut oil production by1.2 million barrels per day from January.

Should that fail to balance the market, OPEC and its allieswill hold an extraordinary meeting, United Arab Emirates EnergyMinister Suhail al-Mazrouei said on Sunday.

"Oil ministers are already taking to the airwaves with a'price stability at all cost' mantra," said Stephen Innes, headof trading for Asia-Pacific at futures brokerage Oanda inSingapore. (Additional reporting by Jane Chung; Editing by Dale Hudson,Louise Heavens and Adrian Croft) ((; +82 2 3704 5667; ReutersMessaging:

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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