Oil prices were little changed on Tuesday as strong supply expectations and modest global demand growth outweighed concerns that rising tensions in the Middle East could hit output.
Brent crude futures for December delivery rose 13 cents, or 0.18%, to $71.83 a barrel by 0615 GMT. WTI futures for November delivery rose 14 cents, or 0.21%, to $68.31.
On Monday, Brent futures ended September down 9%, the third month of declines and the biggest monthly decline since November 2022. It fell 17% in the third quarter, its biggest quarterly loss in a year. WTI fell 7% last month and fell 16% in the quarter.
As market participants look to further supply additions from OPEC+ by the end of this year, there are many concerns about oil prices, with the country’s weak demand outlook reflected in the latest PMI figures continuing.
Market sentiment, however, has been less fragile to the weak data and has found room to stabilize on hopes that the latest stimulus package could help boost the economy.
A survey showed China’s manufacturing activity contracted sharply in September as new orders at home and abroad cooled, with factory owners’ confidence falling to near-record lows.
After a series of below-forecast data over the past few months cast doubts, analysts say a raft of stimulus measures in recent weeks will be enough to bring China’s 2024 growth back to around 5%, but will do little to change the longer-term outlook.
Aside from demand concerns, OPEC+, which brings together OPEC members and allies such as Russia, is set to increase output by 180,000 bpd in December.
Israel’s anticipated ground offensive into Lebanon appeared to have begun early Tuesday, with the country saying it had launched “limited” raids on Hezbollah targets.
But supply concerns appear relatively limited for now, with market participants still pricing in the risks of a wider regional conflict.
The strikes come after Israel killed Hezbollah leader Hassan Nasrallah on Friday, representing a broader and more devastating conflict that is now escalating across the Middle East and threatens to draw in the US and Iran.
A survey on Monday showed US crude and fuel stocks are expected to fall by about 2.1 million barrels in the week to September 27. The preliminary survey was conducted ahead of the API’s report, which is expected to be released at 2030 GMT.
