Oil prices were down on Tuesday amid ongoing concerns that the spread of the Delta coronavirus variant has curbed demand in the world’s second-largest oil consumer, China, while hopes that major oil producers will not raise their outputs have limited further price declines.
International benchmark Brent crude traded at $69.14 at 0747 GMT, posting a 0.53% fall from Monday when trade closed at $69.51 per barrel.
American benchmark West Texas Intermediate (WTI) traded at $66.67 at the same time, decreasing by 0.56% relative to $67.05 a barrel on Monday.
The economic outlook in China raised investor concerns and weighed on prices. Industrial production rose 6.4% in July from the same month a year ago, but this rise was well below market estimates of 7.8%. Retail sales were up 8.5%, again much lower than the 11.5% expectation.
These results came amid rising coronavirus cases in the country. According to the National Health Commission, China recorded 42 new confirmed coronavirus cases on August 16, compared to 51 the day before.
Prices still reflect last week’s negative projections over demand, as the International Energy Agency in its monthly report on Thursday revised its estimates to reflect lower global oil demand for the remainder of 2021 and for 2022.
Meanwhile, the Organization of Petroleum Exporting Countries kept global oil demand growth expectations for 2021 unchanged from the previous monthly report’s assessment.
Further price declines were capped over investor relief that OPEC producers and allies (OPEC+) are sticking to the cartel’s output schedule.
Last week, the US administration urged the OPEC+ group to increase oil production to combat rising domestic gasoline costs.
Earlier in August, the group had agreed to raise output by 400,000 barrels per day from August to December and extend its production cut agreement from April 2022 to December 2022.
Investors are now keeping tabs on the inventory data forecast of the American Petroleum Institute (API) later on Tuesday and data of the US Energy Information Administration (EIA) on Wednesday.
By Sibel Morrow