London November 7 2023: Oil prices fell about 3% to their lowest since late August on Tuesday, as demand concerns arose from mixed Chinese data and waning investor enthusiasm on interest rate cuts.
Brent crude futures fell $2.53, or 3%, to $82.65 a barrel as of 11:34 a.m. ET (1634 GMT), while U.S. West Texas Intermediate crude fell to $78.35 a barrel, down $2.47, or 3.1%.
Both contracts hit their lowest levels since Aug. 25, and Brent futures were set to close below $84 a barrel for the first time since Hamas Islamists’ Oct. 7 attack on Israel.
While China’s crude oil imports in October showed robust growth both year on year and month on month, its total exports contracted at a quicker pace than expected.
Expectations of crude run reductions by China-based refiners between November and December could also limit oil demand and exacerbate price declines.
World shares (.MIWD00000PUS), which often trade in tandem with oil, lost steam on Tuesday as investor enthusiasm about a peak in global interest rates faded. In addition, the U.S. dollar (.DXY) has ticked up from recent lows, making oil more expensive for holders of other currencies.
On the supply side, markets are waiting to see if Saudi Arabia and Russia are ready to rein in production voluntarily beyond the end of the year in addition to a broader deal among the OPEC+ producer group.
OPEC+ is unlikely to be in a hurry to undo oil output cuts when its joint ministerial monitoring committee meets on Nov. 26, said Kelvin Wong, senior market analyst at OANDA.
