NEW YORK: Oil prices fell slightly on Tuesday as investors remained focused on the likelihood that China’s economic malaise will keep hobbling demand from the world’s top crude importer.
Brent crude was down 36 cents at $84.10 a barrel by 11:45 a.m. EDT (1545 GMT). The more active US West Texas Intermediate October contract slipped 36 cents to $79.76.
The front-month WTI contract was down 19 cents at $80.53 a barrel on very limited volume ahead of its imminent expiry. China, the world’s second-largest economy, is considered crucial to shoring up oil demand over the rest of the year. Its sluggish economic activity has frustrated markets as pledged stimulus has fallen short of expectations, including a smaller than expected cut in a key lending benchmark on Monday.
“Saudi and Russian output cuts have been largely negated by weakening crude demand from China that appeared to develop last month and is apt to continue through the rest of the summer,” said Jim Ritterbusch, president of Ritterbusch and Associates LLC in Galena, Illinois.
Amplifying demand concerns, US central bank officials have not ruled out further interest rate hikes to contain inflation.
The US is expected to continue to draw on its oil stocks. A preliminary Reuters poll showed that crude oil and gasoline inventories were expected to have fallen last week, with data from American Petroleum Institute due later on Tuesday.
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