Brent crude oil futures slipped after growth forecasts for the U.S. and Japan were slashed by the International Monetary Fund, Bloomberg reports.
The U.S. economy will grow slower this year than it did last year, according to the IMF. The driver of that forecast is the unemployment rate being higher than 8 percent while consumer confidence is dropping. The growth rate in Japan, meanwhile, slipped from 1.6 percent to 1.4 percent, largely because of the March 11 earthquake, subsequent tsunami and fallout from both natural disasters.
The IMF "clearly engendered some downward price pressure across a number of financial markets, including crude oil," Jason Schenker, president of energy advisory firm Prestige Economics in Texas, told the news service. "We're looking at pretty solid global growth, it's just a deceleration of growth."
Shortly prior to 3:45 p.m. on Monday, Brent crude oil futures were down 2.32 percent, a $2.94 reduction to $123.71 per barrel.
Ongoing strife in Libya and a proposed pact presented to leader Muammar Gadhafi also will impact the commodity.
"The markets came off a bit, but it's unclear as to whether this agreement is going to happen," Tom Bentz, a broker with BNP Paribas Commodity Futures in New York, told Bloomberg. "We're going to need to see an end to some of the violence in Libya before paying attention to other things."
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