Oil slipped on Tuesday as investors absorbed a bleak outlook for fuel demand with data pointing to a global manufacturing downturn just as OPEC+ producers meet this week to decide whether to increase supply.
Surveys showed on Monday that factories across the United States, Europe and Asia struggled for momentum in July as flagging global demand and China’s strict COVID-19 restrictions slowed production.
Brent crude was down $1.40, or 1.4 per cent, to $98.63 a barrel, while U.S. West Texas Intermediate crude fell $1.00, or 1.1 per cent, to $92.89.
Oil soared earlier in 2022, with Brent in March coming close to its all time high of $147 a barrel after Russia’s invasion of Ukraine added to supply concerns. Concerns about slowing growth have since eclipsed tight supply.
In focus this week is a meeting on Wednesday between the Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, together known as OPEC+, to decide whether to increase output in September.
Two of eight OPEC+ sources told Reuters that a modest increase for September would be discussed, while the rest said producers are likely to hold output steady.
Also coming into view is the latest weekly reading on U.S. inventories. Analysts expect a decline in crude and gasoline stocks.