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Oil prices declined on Tuesday following weak economic data from China and the US, while growing expectations that the US Federal Reserve (Fed) will lower interest rates and ongoing conflicts in the Middle East limited further price falls.
International benchmark Brent crude decreased by 0.2% to $71.69 per barrel at 10.48 a.m. local time (0748 GMT), up from the previous session’s close of $71.84. US benchmark West Texas Intermediate (WTI) fell 0.3% to $68.53 per barrel after closing at $68.71 in the prior session.
Weak economic data from China, the world’s largest oil importer, and the US, the largest oil consumer, triggered downward price movements on Tuesday.
According to the data, consumer prices in China increased by 0.6% year-on-year in August, falling short of expectations. While the foreign trade surplus in the country in the same period was above expectations at $91 billion, exports exceeded the forecasts with an increase of 8.7%.
Imports, on the other hand, fell short of expectations, rising 0.5%. Analysts also reported that lower-than-expected import data in China increased economic recession concerns in the country.
Inflation data will be released in the US tomorrow. Recession concerns in the country and the expectation that a recession period might begin continues.
However, market players’ concerns over the Fed’s next move and its potential impact limited upward price movements.
The Fed is projected to cut interest rates by 25 basis points with a 30% probability this month. The bank is expected to cut interest rates by a total of 100 basis points by the end of the year.
Meanwhile, concerns that the ongoing conflicts in the Middle East will spread to a wider area and disrupt global oil supply partially support upward price movements.
The US said Monday that its forces destroyed two Houthi missile systems and a support vehicle in Houthi-controlled areas of Yemen in the past 24 hours.
“Additionally, USCENTCOM forces successfully destroyed one Houthi unmanned aerial vehicle over the Red Sea,” US Central Command said on X.
Ongoing conflicts in the Red Sea, one of the world’s most frequently used sea routes for oil and fuel shipments, lent support to upward price movements.
Markets are awaiting the Organization of Petroleum Exporting Countries (OPEC) monthly oil market report and the Energy Information Administration’s (EIA) Short-Term Energy Outlook report, which includes forecasts for the global market and US crude oil production.
