Oil prices fell on Tuesday as the U.S. renewed efforts for a ceasefire in the Middle East and slowing demand growth in China, the world’s largest oil importer, continued to weigh on the market.
Brent crude futures for December delivery fell 60 cents, or 0.8%, to $73.69 a barrel by 0717 GMT. WTI Crude futures for November delivery fell 6 cents, or $70.50 a barrel, on the front month’s last day of the contract.
WTI futures for December, which will soon be the front month, fell 57 cents, or 0.8%, to $69.47 a barrel.
Brent and WTI closed nearly 2% higher on Monday, offsetting some of last week’s more than 7% declines. These declines were driven by concerns about oil supply disruptions as Middle East conflicts persist and the market’s expected retaliation against Iran.
Monday’s gains were attributed to technical profit-taking and short-covering as oil prices trend lower and forecasts point to weaker demand and oversupplied oil markets.
Blinken arrived in Israel on Tuesday as part of his first stop on a Middle East tour, where he is set to revive talks to end the Gaza war and de-escalate the conflict in Lebanon.
Crude oil prices have been fluctuating in response to mixed news from the Middle East, swinging between escalation and de-escalation.
The market is expected to rise if China’s economic recovery shows clearer signs and is supported by an improving U.S. economy. However, gains are likely to be limited amid ongoing uncertainty about the overall global economic outlook.
China lowered its benchmark credit rate as expected on Monday, following cuts to other policy rates last month as part of a raft of stimulus measures to boost the economy.
The move came after data on Friday showed the Chinese economy grew at its slowest pace since early 2023 in the third quarter, fuelling growing concerns about oil demand.
China’s oil demand growth is expected to remain weak in 2025 despite Beijing’s latest stimulus measures as the world’s No. 2 economy electrifies its vehicle fleet and grows at a slower pace.
Still, Saudi Aramco said yesterday it was optimistic about China’s oil demand, especially in light of the government’s stimulus package aimed at boosting growth.
Also contributing to the downward pressure on the oil market is a strengthening U.S. dollar, driven by a gradual easing of global inflation.
A stronger dollar normally weighs on oil prices because it makes it more expensive for non-dollar holders to buy dollar-priced commodities.
A preliminary survey on Monday showed U.S. crude oil inventories probably rose last week, while distillate and gasoline inventories fell.
