Crude oil storage tanks are seen from above at the Cushing oil hub, appearing to run out of space to contain a historic supply glut that has hammered prices, in Cushing, Oklahoma, March 24, 2016. Reuters/Nick Oxford//File Photo
By Reuters
Oil prices dipped on Tuesday following the previous session’s slump, while a flurry of economic data from Germany, the wider euro zone and Britain sketched a bearish picture that could weigh on oil demand.
Moving between positive and negative territory in the session, Brent crude futures were down 47 cents, or 0.5%, at $89.38 a barrel at 1356 GMT, while U.S. West Texas Intermediate crude futures were down 47 cents, or 0.6%, at $85.02 a barrel.
Euro zone business activity took a surprise turn for the worse this month, data showed on Tuesday, suggesting the bloc may slip into recession.
German readings suggested a recession in the country is well underway, while Britain’s businesses reported another decline in activity this month, underlining the risk of recession ahead of the Bank of England’s interest rate decision next week.
In the United States in contrast, business output ticked higher in October as the manufacturing sector pulled out of a five-month contraction.
Meanwhile, the International Energy Agency said it expected fossil fuel demand to peak by 2030 based on governments’ current policies.
Both oil benchmarks fell more than 2% on Monday as diplomatic efforts in the Middle East, the world’s biggest oil-supplying region, intensified to contain the conflict between Israel and Hamas.
Julius Baer analyst Norbert Ruecker said “the risk premium inherent to oil prices should disappear within weeks … we see prices heading lower into next year.”
In the U.S., crude stockpiles were expected to have risen last week, a preliminary Reuters poll showed on Monday.
The report from the American Petroleum Institute industry group is due at 2030 GMT on Tuesday and the Energy Information Administration report at 1430 GMT on Wednesday.