By Scott DiSavino NEW YORK (Reuters) -Oil prices fell about 3% to a two-week low on Monday, pressured by losses in Wall Street technology and energy stocks, as investors took cover after news of surging interest in Chinese startup DeepSeek’s low-cost artificial intelligence model. Oil was already down earlier in the session on weak economic […]
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Oil prices drop 3% as stocks tank on China’s DeepSeek news
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By Scott DiSavino
NEW YORK (Reuters) -Oil prices fell about 3% to a two-week low on Monday, pressured by losses in Wall Street technology and energy stocks, as investors took cover after news of surging interest in Chinese startup DeepSeek’s low-cost artificial intelligence model.
Oil was already down earlier in the session on weak economic data from China and worries that U.S. President Donald Trump’s proposed tariffs could further pressure economic growth and energy demand.
Brent futures fell $2.00, or 2.6%, to $76.50 a barrel by 12:02 p.m. EST (1702 GMT). U.S. West Texas Intermediate (WTI) crude fell $2.06, or 2.8%, to $72.60.
Brent was on track for its lowest close since Jan. 8 and WTI for its lowest since Dec. 31.
Analysts have said oil prices have been depressed in recent days following Trump’s call last week for the Organization of the Petroleum Exporting Countries (OPEC) to reduce oil prices.
“President Trump continued to put the pressure on OPEC … calling on the producer group to lower prices to help end the Russian war in Ukraine,” Bob Yawger, director of energy futures at Mizuho, said in a report.
OPEC and its allies including Russia in the OPEC+ group have yet to react to Trump’s call, with OPEC+ delegates pointing to an existing plan to start raising oil output from April.
President Trump’s tariff threats have also mostly pressured oil prices, feeding worries that a trade war could hurt global economic growth and oil demand.
Over the weekend, the U.S. threatened and then swiftly reversed plans to impose sanctions and tariffs on Colombia after the South American nation agreed to accept deported migrants from the U.S.
Colombia last year sent about 41% of its seaborne crude exports to the U.S., data from analytics firm Kpler shows. The agreement will allow that oil to continue to flow, another factor pressuring crude prices on Monday.
“There is broad-based negative sentiment in the market. Even if the sanctions didn’t take place, this still creates nervousness that Trump will bully whoever needs to be bullied to get his way,” said Bjarne Schieldrop, chief commodities analyst at SEB.
In China, the world’s second biggest economy behind the U.S., manufacturing data was weaker than expected, adding fresh concerns over energy demand.
“The weak readings highlight the need for more policy efforts to stabilize economic growth,” analysts at Citibank said in a report.
Chinese startup DeepSeek’s AI Assistant overtook U.S. rival ChatGPT to become the top-rated free application available on Apple’s App Store in the U.S. That fed doubts among investors who have poured money into U.S. energy firms hoping Artificial Intelligence (AI) will drive demand for energy to power data centers.
In Germany, Europe’s the biggest economy, data from the Ifo Institute showed business morale unexpectedly improved in January thanks to a more positive assessment of the economy. Yet analysts said many companies remain pessimistic ahead of elections.
“The slight increase in Germany’s most prominent leading indicator does not yet signal an imminent economic rebound. Instead, the economy remains stuck in stagnation with more downside than upside risks in the short term,” analysts at ING, a bank, said in a report.
(Reporting by Scott DiSavino, Anna Hirtenstein and Robert Harvey; Additional reporting by Florence Tan; Editing by David Goodman, Ros Russell and David Gregorio)