Oil prices fell on Tuesday as investors remained focused on the likelihood that China’s economic situation will continue to curb demand from the world’s largest oil importer.
Brent crude finished down 43 cents, or 0.5%, to settle at $84.03 a barrel, while the most active October contract in the United States fell 48 cents to $79.64.
WTI’s first-month contract fell $0.37 to $80.35 a barrel on very limited volume ahead of its impending expiration.
China, the world’s second-largest economy, is seen as crucial to sustaining oil demand for the remainder of the year. Its sluggish economic activity frustrated markets as promised stimulus fell short of expectations, including a smaller-than-expected cut in a key lending metric on Monday.
“Production cuts in Saudi Arabia and Russia were largely offset by weakening oil demand from China, which appears to have built up over the past month and is expected to continue through the rest of the summer,” said Jim Ritterbusch, president of Ritterbusch. and Associates LLC in Galena, Illinois.
Compounding demand concerns, US central bank officials have not ruled out further interest rate hikes to curb inflation.
Source: Terra
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