On Monday, oil prices plummeted 2% as investors became more risk apprehensive, hurting stock markets and strengthening the U.S. dollar, making oil more expensive for holders of foreign currencies.
After falling to a session low of $73.52, Brent crude slid $1.42, or 1.9 percent, to end at $73.92 per barrel. After falling as low as $69.86, U.S. West Texas Intermediate (WTI) fell $1.68, or 2.3 percent, to settle at $70.29.
Concerns about Chinese property developer Evergrande's solvency shook equities markets, and investors braced for the Federal Reserve to take another step toward tapering this week, sending the dollar higher.
"Oil gets more expensive for non-dollar markets, and prices get a hit. As a result, a bearish move backed by the stock market itself in an environment of risk aversion."
Nonetheless, reports that some U.S. Gulf output will be shut down for months owing to storm damage boosted oil prices.
All output from the company's holdings in the Mars corridor of the Mississippi Canyon area is transferred to onshore crude terminals through this facility.
According to Artem Abramov of Rystad Energy, the lost production will cut Gulf of Mexico oil supplies by 200,000 to 250,000 barrels per day (BPD) for several months. The Gulf accounts for around 16% of U.S. oil production or 1.8 million barrels per day.
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