Oil prices fall on fears of economic slowdown
Oil prices edged lower on Tuesday on fears of an economic slowdown and lower fuel demand from China as it persists with its stringent zero-COVID policy.
Brent crude futures fell 41 cents, or 0.45%, to US$91.21 a barrel by 0948 GMT while U.S. West Texas Intermediate (WTI) crude futures fell 41 cents, or 0.48%, to US$85.05.
WTI had risen earlier by more than US$1 a barrel on a weaker dollar, which makes oil cheaper for buyers holding other currencies.
But the U.S. dollar index measuring the greenback against six peers rose later in the session, weighing on oil prices in early European trading.
Also in focus was the Bank of England’s plan to start selling the vast government bond holdings it amassed during the coronavirus crisis. That sent long-dated yields higher, indicating increased risks to financial stability.
Meanwhile, China’s fuel demand outlook weighed on sentiment after the world’s top crude oil importer delayed release of economic indicators originally scheduled to be published on Tuesday, CMC Markets analyst Tina Teng said. No date was given for a rescheduled release.
China’s adherence to its zero-COVID policy has continued to increase uncertainties about the country’s economic growth, Teng said.
On the supply side, U.S. crude oil stocks were expected to have risen for a second consecutive week and are estimated to have increased by 1.6 million barrels in the week to Oct. 14, a preliminary Reuters poll showed on Monday.
Output in the Permian Basin of Texas and New Mexico, the biggest U.S. shale oil basin, is forecast to rise by about 50,000 barrels per day (bpd) to a record 5.453 million bpd this month, the Energy Information Administration said.