Oil prices markedly dropped on Monday, as the market has been overshadowed by rising concerns over trade tensions between China and the United States.
The West Texas Intermediate for September delivery decreased 0.97 U.S. dollar to settle at 54.69 U.S. dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery fell 2.08 U.S. dollars to close at 59.81 U.S. dollars a barrel on the London ICE Futures Exchange.
The plunges came following significant gains last Friday, when U.S. oil futures rose 1.71 U.S. dollars and Brent crude climbed 1.39 U.S. dollars.
Such rallies were driven by geopolitical tensions between Iran and the West in the region, which harmed flow of crude through the Strait of Hormuz.
U.S. President Donald Trump tweeted last Thursday that he would place an additional 10-percent tariff on the remaining 300 billion dollars' worth of Chinese imports starting on September 1.
The U.S. crude benchmark and the international benchmark plunged nearly eight percent and seven percent, respectively, during that day after the announcement was tweeted.
U.S. stocks closed sharply lower on Monday. The Dow dropped 2.90 percent to 25,717.74, the S&P 500 fell 2.98 percent to 2,844.74, and the Nasdaq was down 3.47 percent to 7,726.04.
The Cboe Volatility Index, widely considered to be the best fear gauge in the market, jumped nearly 40 percent to 24.59 after U.S. stock market close.
In particular, the S&P energy sectors tumbled over three percent mostly during afternoon sessions, among the worst performers of the 11 primary S&P 500 sectors, which further dampened investor sentiment and fueled concerns over global energy demand.