Oil prices were mixed on Tuesday as data showing that the Chinese economy is still battling a post-pandemic recovery offset expectations of an extended supply cut from leading OPEC+ members Saudi Arabia and Russia.
Brent crude futures for November fell 26 cents, or 0.29%, to $88.74 a barrel at 06:20 GMT. Meanwhile, West Texas Intermediate crude oil (WTI) futures for October advanced 21 cents, or 0.25%, to $85.76.
Saudi Arabia is expected to extend its voluntary oil cuts until October, and Russia will announce a new OPEC+ supply cut deal this week.
Moscow had already announced it would cut exports by 300,000 barrels per day (bpd) in September, after cutting 500,000 bpd in August. Riyadh is also expected to roll over the 1 million bpd voluntary cut to October.
Given the market expectations, it is unlikely that the two producers would risk selling in the market by walking away from the extension.
China’s services activity expanded at its slowest pace in eight months in August as weak demand continued to trail the world’s second-largest economy and stimulus failed to reinvigorate consumption meaningfully.
Analysts said markets were pricing in China’s recent efforts to boost the economy, offsetting support from anticipated oil supply cuts.
Household expenditures in Japan, the world’s third-largest economy, decreased by 5.0% in July compared to the previous year; this is deeper than the estimated 2.5% drop.