Weak data from the United States and China added to expectations of a weak global economy and oil demand, helping to drive a broader pullback in global markets.
WTI crude fell to the same opening levels of $68.90 a barrel as did British Brent crude, after a slight rise for both in the Asian and European sessions before the Bank of Canada meeting and the interest rate cut, with prices falling again.
Meanwhile, traders believe that there may be an end in sight to the conflict that has halted Libyan oil exports, which could bring more crude oil back to the market.
This poses a challenge to the OPEC+ group, which last week appeared ready to increase planned production in October, but one source said concerns have increased in the group due to market volatility resulting from the closure of oil facilities in Libya and the weak demand outlook.
“If OPEC+ fails to provide assurances that current production cuts will be extended indefinitely, the market may lose confidence in OPEC+’s ability to defend $70 a barrel,” Citi analysts said in a note.
The latest data has raised broader concerns about weaker-than-expected demand from China and a decline in U.S. consumption.
In China, the world’s largest importer of crude oil, data showed manufacturing activity fell to a six-month low in August, while new home price growth slowed in the same month.
The weekly U.S. inventory data was delayed by the Labor Day holiday on Monday.
A preliminary Reuters poll showed on Tuesday that U.S. crude oil and gasoline stocks were expected to have fallen last week, while distillate inventories were likely to have risen.
