Oil prices fell in Asian trade on Tuesday, extending losses seen in the previous session, as weak economic data from China and expectations of a U.S. interest rate increase weigh on the market.
Brent crude was down 0.3%, or 24 cents, to $79.07 a barrel by 0615 GMT, while U.S. West Texas Intermediate (WTI) crude fell 0.3%, or 25 cents, to $75.41 a barrel. Both benchmarks fell by more than $1 in their last session.
China’s manufacturing activity unexpectedly fell in April, official data showed on Sunday, the first contraction since December in the manufacturing purchasing managers’ index.
China’s industrial and economic recovery from the coronavirus pandemic was expected to boost demand this year.
Despite China’s weak manufacturing data, there are positive signs of recovery based on spending during the five-day Labour Day holiday in the world’s largest oil importer, said analysts in an ANZ Research note.
Over the weekend, CCTV reported hat passenger travel on the first day of the holiday surged 151.8% from the same day last year, while the number of air, road, waterway and railway trips rose to 56.99 million on the day.
Meanwhile, a Monday poll showed that U.S. crude oil stockpiles are expected to have fallen for a third consecutive week, providing some support to the market.