Oil prices fell on Tuesday after heavy losses in the previous session, as two days of weak Chinese data added to worries about the top crude oil importer’s energy demand growth.
Brent crude LCOc1 fell 47 cents or 0.79 per cent to 58.88 dollars a barrel by 0527 GMT, while U.S. West Texas Intermediate crude CLc1 dropped 40 cents or 0.75 per cent, to 53.19 dollars.
China has been hit by poor economic data for two straight days. The National Bureau of Statistics (NBS) reported on Tuesday that China’s factory gate prices declined at the fastest pace in more than three years in September.
That followed customs data on Monday that showed Chinese imports had contracted for a fifth straight month.
The U.S.-China trade dispute also continued to cast a shadow on the global economy, despite claims of progress towards a deal, leaving unanswered questions over future oil demand.
Taken all together that was enough to outweigh any support oil prices might have received from geopolitical tensions in the Middle East.
“Subdued global economic momentum has afflicted strong bearish bias on oil prices as traders deliberate demand-side weaknesses in the current term,” Phillip Futures said in a note on Tuesday.
On Monday U.S. President Trump imposed sanctions on Turkey and demanded the NATO ally stop a military incursion in northeast Syria that is rapidly reshaping the battlefield of the world’s deadliest ongoing war.
Prices could get a boost later in the week as investors are expecting a drawdown in crude inventories in the United States.
“This week … markets are expecting to see a draw (on) U.S. stockpiles and possibly further escalations in the Middle East,” said Edward Moya, senior market analyst at OANDA.