Goldman Sachs has lowered its price estimate for Brent crude to under $90 per barrel by the end of 2023 after two previous reductions to its forecast in the past six months.
The move comes after a series of weak data points out of China, the world's biggest oil importer. Producer prices slumped at their fastest clip in seven years last month, while exports, imports and factory activity also slipped.
As a result, worries abound that China's nascent recovery from harsh COVID-era restrictions that started in the first quarter may be waning. This would be a major development for oil markets, which had been expecting the country's post-pandemic rebound to fuel a surge in demand this year.
Elsewhere on Monday, Iran's supreme leader said Tehran was open to a deal with the West over its nuclear program. The statement suggested that the market may potentially be flooded with additional supply if sanctions on Iranian crude exports are lifted, weighing on oil prices.
By 05:03 ET, U.S crude futures dropped by 2.76% to $68.23 a barrel, while the Brent contract fell by 2.43% to $72.97 per barrel.