Reuters reported that oil futures dipped as increasing signs of global economic slowdown prompted risk aversion with the increase in speculators' short positions in US crude further deepening its discount to North Sea Brent.

Mr Oliver Jakob with Petromatrix said that by 0916 GMT, US crude futures slipped by 75 cents to USD 98.54 per barrel. Brent crude dipped by 34 cents to USD 118.44. Signs of slowdown are everywhere.

World stocks fell to 12 week low mainly because Chinese data highlighted concerns about weaker global growth momentum, prompting investors to unwind positions in higher risk assets and buy government bonds.

The MSCI world equity index fell to its weakest since mid March. The index lost nearly 8% since hitting 3 year peak in late April and is very close to erasing all of its 2011 gains.

Further pressure came from Saudi Arabia's divergence with the rest of OPEC last week. Riyadh will raise output to 10 million barrels per day in July as Riyadh goes it alone in pumping more outside official OPEC policy aiming to place additional supplies among Asian buyers.

Mr Jakob said that the main driver is Friday's CFTC report showing money managers increased short positions in US crude in the week before the OPEC meeting. It is pressuring the discount on US crude.

(Sourced from Reuters)