U.S. crude oil falls to six-month low as market sells off on recession fears

U.S. crude oil futures fell to a six-month low on Monday as equity markets sold off on fears the economy might be teetering on the brink of a recession.

West Texas Intermediate is now up roughly 2% for the year while Brent is now down marginally for 2024, after trading higher for months on geopolitical risk in the Middle East and forecasts that the oil market would tighten in the third quarter.

U.S. crude oil closed below $73 per barrel, the lowest settlement since Feb. 5.

"In times of crises all assets correlate," Matt Smith, lead oil analyst for the Americas at Kpler, said of oil following equity markets lower. But geopolitical tensions in the Middle East and OPEC's ongoing production cuts are providing a floor for crude prices, Smith said.

Here are Monday's closing energy prices:

The sell-off comes after U.S. job growth disappointed in July, with the unemployment rate rising to 4.3%, the highest level since October 2021. The U.S. manufacturing sector also contracted in July for the fourth consecutive month.

The weak economic data in the U.S. comes as lackluster demand in China had already been spooking traders.

"Already before we had the jobs report, already before the manufacturing data, we were concerned about weaker imports into China, weaker refinery utilization rates in China," Helima Croft, head of global commodity strategy at RBC Capital Markets, said on CNBC's "Squawk Box" on Monday.

OPEC+ is also expected to start increasing production in October, though the group indicated last week that this decision "could be paused or reversed, depending on prevailing market conditions." Croft said OPEC+ is now unlikely to start ramping up production.

"If the trend continues, I just can't imagine OPEC would go forward with