SINGAPORE: Brent futures slipped below $109 a barrel on Tuesday because of worries over demand from the world's second-biggest oil consumer China, but forecasts of a third straight drop in weekly US crude inventories kept the losses in check.
Confirmation later in the day of the expected fall in stockpiles in the world's biggest oil consumer may push the US benchmark to a new high for the year, narrowing its difference to Brent further. The European contract remained under pressure because of China's weak growth outlook and uncertainty surrounding Europe amid ample global supplies.
"We expect Brent to underperform the US benchmark because the latest Chinese numbers were weak and there are further downside risks to China," said Natalie Rampono, an analyst with ANZ in Melbourne.
"The US contract will do better as pipeline bottlenecks get alleviated, improving crude flows and due to seasonal tightness."
Brent crude slipped 29 cents to $108.80 a barrel by 0729 GMT, after rising earlier to as much as $109.22 - just off a three-month high hit on Monday.
US oil fell 11 cents to $106.21. It touched this year's high of $107.45 on July 11.
The Asian Development Bank (ADB) on Tuesday lowered its growth forecasts for developing Asia this year and the next as a softer outlook for China meant subdued economic activity elsewhere in the region. A day earlier, China had said its second-quarter growth slowed.
Meanwhile, US commercial crude stocks likely fell 2 million barrels on average for the week ended July 12, a Reuters poll of eight analysts showed.
Any fall would add to a 20-million-barrel plunge in US crude inventories Aug. 25-July 5 that was the largest two-week draw ever, according to Energy Information Administration data.
Comments
Comments are closed for this article.