Working light bulbs are seen at the Montebello Oil Field in Montebello, California. Oil prices fell slightly on Tuesday, extending losses from the previous session, as investors worried about global oil demand following weak manufacturing data in several countries.
Frederick J. Brown | Afp | Getty Images
Oil fell on Tuesday as investors absorbed a bleak outlook for fuel demand with data pointing to a drop in global manufacturing just as OPEC+ producers meet this week to decide whether to raise output offer
Surveys showed on Monday that factories in the United States, Europe and Asia struggled to build momentum in July as declining global demand and China’s tight COVID-19 restrictions slowed output.
“These readings did nothing to mitigate recession fears,” Tamas Varga told oil broker PVM.
Brent crude was down 3 cents at $100.00 a barrel, while U.S. West Texas Intermediate crude fell 16 cents to $93.73.
Oil soared in early 2022, with Brent in March nearing an all-time high of $147 a barrel after Russia’s invasion of Ukraine added to supply concerns. Since then, concerns about slowing growth have overshadowed tight supply.
“The bullish momentum in oil prices has gradually faded,” Haitong Futures analysts said. “Once the supply and demand situation shows any sign of further deterioration, oil is likely to lead the decline among commodities.”
The focus this week is a meeting on Wednesday between the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, collectively known as OPEC+, to decide whether to raise production in September.
Two of the eight OPEC+ sources told Reuters a modest increase would be discussed for September, while the rest said producers were likely to hold output steady.
The latest weekly reading on US inventories is also out. Analysts expect a decline in crude oil and gasoline inventories. The first report this week is due at 20:30 GMT from the American Petroleum Institute.