Oil traded near a seven-week low on a shaky demand outlook, especially in the biggest importer China.
Brent crude held below $80 a barrel after losing more than 3% over the previous two sessions, while West Texas Intermediate was around $75. Banks including Citigroup Inc. have downgraded their growth forecasts for Asia’s biggest economy, while export prices of US oil heading to the region are also weakening. China’s second-half imports are also seen staying weak.
Crude remains modestly higher for the year, aided by OPEC+’s supply cutbacks and expectations for lower borrowing costs in the US. An interest-rate decision from the Federal Reserve is due on Wednesday, while OPEC+ will hold a monitoring meeting a day later. The market is split on whether the cartel will proceed with a scheduled output increase next quarter.
Technical indicators are showing the latest move lower has been too quick, with both Brent and WTI now oversold on the nine-day relative strength index. Traders will look to an industry report on US stockpiles later on Tuesday to see whether they will extend a four-week drop.
Brent for September settlement fell 0.5% to $79.40 a barrel at 12:03 p.m. in Singapore.
WTI for September delivery slipped 0.5% to $75.43 a barrel.
Source : Bloomberg